Rare earth elements (Ln: Sm, Eu, Tb, Dy) were complexed with caffeic acid (Caf), a natural phenolic compound, to synthesize novel luminescent complexes with enhanced biological activities. The complexes, formulated as Ln(Caf)3·4H2O, were characterized using infrared spectroscopy (IR), thermogravimetric analysis (TGA/DTA), mass spectrometry (MS), and fluorescence spectroscopy. Structural studies confirmed the coordination of caffeic acid via carboxylate and hydroxyl groups, forming stable hexacoordinate complexes. Luminescence analysis revealed intense emission bands in the visible spectrum (480–700 nm), attributed to f-f transitions of Ln3+ ions, with decay lifetimes ranging from 0.054 to 0.064 ms. Biological assays demonstrated significant antibacterial activity against Escherichia coli, Staphylococcus aureus, and Pseudomonas aeruginosa, with inhibition zones up to 44 mm at 200 µg/mL. The complexes also exhibited potent anticancer activity against MCF7 breast cancer cells, with Sm(Caf)3·4H3O showing the lowest IC50 value (15.5 µM). This study highlights the dual functionality of rare earth metal-caffeic acid complexes as promising candidates for biomedical imaging and therapeutic applications.