GaN/Al0.12Ga0.88N and Ga0.99Gd0.01N/Al0.12Ga0.88N multiquantum well samples with the quantum well thickness of one nm were grown by a radio-frequency plasma-assisted molecular-beam epitaxy on GaN (0001) templates. The epitaxial growth is established in the grown samples. Gd doped multi-quantum well samples show magnetic behaviour at room temperature. Photoluminescence measurements show a strong photoluminescence at the higher energy side of GaN excitonic peak for the GaN multiquantum wells. A new luminescence peak at 3.598 eV was found for Gd doped GaN multi-quantum wells. This photoluminescence peak is attributed to the formation of an exciton–polaron in the distorted regions around the Gd dopants in GaN multi-quantum wells.