Undoped and europium (Eu3+) doped CaWO4 samples were prepared at room temperature using co-precipitation method and investigated for their thermal stability by annealing at different temperatures, namely 300, 500, 700 and 900 degrees C in air. It is observed that incorporation of Eu3+ ions destabilizes CaWO4 lattice and favors its decomposition at elevated temperatures. Powder X-ray diffraction (XRD) studies confirmed that as-synthesized CaWO4: 1% Eu3+ remains stable up to an annealing temperature of 500 degrees C, and above that it partially decomposes into WO3 phase. Unlike this, undoped CaWO4 remains stable under similar annealing conditions. Photoluminescence, UV-Visible, and infra-red absorption studies provide important evidence for partial decomposition of CaWO4: 1% Eu3+ into its constituent oxides upon annealing at temperatures above 500 degrees C.