Materials that can simultaneously offer energy-related performance and sensing capabilities hold immense promise for real-time system monitoring, efficient operation, and intelligent integration, especially in domains such as biomedical devices, aerospace, wearable electronics, and next-generation energy platforms. These multifunctional materials acting as a technological bridge between human/machine or plant/machine interfaces provide a transformative pathway for modern smart systems. Recent advances of rare-earth-doped metal-oxide nanostructures have effectively demonstrated their dual functionality. Doping with rare-earth ions (e.g., La3+, Ce3+, Eu3+, Gd3+, Nd3+) significantly alters the structural, electronic, and surface properties of host oxides such as TiO₂, SnO₂, CeO₂, ZnO, and complex compounds like the silicon oxynitride phosphors (SrSi2O2N2:Eu2+, Dy3+; BaSi2O2N2:Eu2+, Dy3+; and (Sr,Ba)Si2O2N2:Eu2+, Dy3+; plus SrSi2O2N2:Yb2+, Dy3+). These modifications concurrently enhance energy storage/harvesting capabilities and sensing performance in terms of selectivity and detection limits. Thanks to their tunable physicochemical traits, these advanced materials have been employed as active electrodes in supercapacitors, lithium-ion batteries, and photoelectrochemical cells, while also serving as chemiresistive and optoelectronic sensors. However, substantial opportunities remain to uncover further functionality. This chapter offers a comprehensive overview of the current research landscape on smart hybrid materials based on rare-earth-doped oxides and related systems, emphasizing design strategies and their integration into self-powered, dual-function devices.