Potassium europium molybdate, KEu(MoO₄)₂, is an intriguing material known for its efficient luminescence properties attributed to Eu³⁺ ions and its polymorphic nature. Despite its significance, research on the metastable γ-phase has been limited, with no prior reports on its structure, particle morphology, and luminescence characteristics. In this study, both the stable α-phase and the metastable γ-phase of KEu(MoO₄)₂ were synthesized using solid-state and hydrothermal reaction methods, and their crystal structures, particle morphologies, and luminescence properties were comprehensively investigated. X-Ray diffraction analysis confirmed the formation of the triclinic α-phase and the orthorhombic γ-phase, with factor analysis results consistent with theoretically optimized structures, facilitating accurate structural determination. Both phases exhibited typical photoluminescence (PL) spectra of Eu³⁺ ions. However, in the γ-phase, the ⁵D₀ → ⁷F₂ transition appeared as a non-split peak with minimal Stark effect, attributed to differences in structural symmetry between the phases. A red-shift in the PL excitation edge was observed in the α-phase, which was attributed to a narrowed band gap resulting from the broadening of the O-p orbital in the valence band, as indicated by density functional theory (DFT) calculations. Additionally, KEu(MoO₄)₂ was doped with Y³⁺ ions to form K(Eu,Y)(MoO₄)₂, revealing a solid solubility limit of 40% in the α-phase, while the γ-phase displayed no solid solution limit. The estimated critical distance of Eu³⁺ ions suggested that Eu–Eu interactions contributing to concentration quenching are minimal in the stacking direction but significant in the in-plane direction, operating in the second shell.