A new alkaline earth–rare earth iodate, Ba₂Ce(IO₃)₈(H₂O), has been synthesised by a hydrothermal method and its structure has been determined by single-crystal X-ray diffraction. Ba₂Ce(IO₃)₈(H₂O) crystallises in the polar space group Pna2₁ (No. 33) with unit cell parameters of a = 15.5042(5) Å, b = 7.8841(3) Å, c = 19.5359(8) Å, V = 2388.00(15) ų, and Z = 4. The structure of Ba₂Ce(IO₃)₈(H₂O) is characterised by zero-dimensional (0D) [Ce(IO₃)₈(H₂O)]⁴⁻ units separated by Ba²⁺ cations. Large crystals of Ba₂Ce(IO₃)₈(H₂O) with dimensions of a few millimetres have been grown. The UV-vis-NIR transmission spectroscopy measurements of the compound showed that it has a short wavelength absorption edge at 381 nm. Ba₂Ce(IO₃)₈(H₂O) exhibits a relatively weak second-harmonic-generation (SHG) response, about 0.2 times that of KDP, which is mainly due to the fact that the polarisation effects of the IO₃ groups in the structure largely cancel each other out. The relationships between the structure and the physical properties of Ba₂Ce(IO₃)₈(H₂O) have also been calculated theoretically. Ba₂Ce(IO₃)₈(H₂O) has a band gap of 2.44 eV, which is determined by the Ce–O and I–O interactions and is larger than those of many simple metal iodates. The introduction of alkaline earth metals favours an increase in band gap. Our work shows that the SHG and birefringence properties are closely related to the arrangement of the functional groups in the compounds.