Hexagonal wurtzite structured Eu3+-doped CdS nanoparticles (CdS:Eu NPs) were synthesized via a gas–liquid phase chemical deposition method. It is found that as-prepared CdS:Eu NPs exhibit distinct and stronger room-temperature ferromagnetism (RTFM). The ferromagnetism as observed from the zero-field-cooling and field-cooling curves of CdS:Eu NPs has been further confirmed by our first-principles calculations based on the density functional theory. Because of a coupling between the 4f-related spin polarized states and the carriers, the half metallic ferromagnetic CdS:Eu NPs could be a desired material for the use in spintronics. The origin of ferromagnetism in CdS:Eu NPs is attributed primarily to the Eu atoms and partially to the Cd vacancies as well.