Superconducting powders with the composition of (Y1-xEux)Ba2(Cu1-yFey)4O8 have been prepared by a simple sol-gel method at an oxygen pressure of 1 atm starting from an aqueous mixture of the metal acetates. Homogeneous gels were achieved by complexing copper ions by tartaric acid before the gelation process. Thermal decomposition of the gels was studied by thermogravimetry and evolved gas analysis. Single-phase bulk samples were obtained after annealing at 780 °C for 40 h. Studies on the (Y1-xEux)Ba2Cu4O8 system confirmed that yttrium may be replaced by europium within the whole substitutional range (x = 0.0-1.0). The lattice volume was expanded while the Tc was slightly decreased with the increasing europium content x. On the other hand, doping with iron both destabilizes the YBa2Cu4O8 phase and has a strong effect on its properties even at very low concentrations (y = 0.01-0.05). Besides the XRD and SQUID measurements the samples were characterized by thermal analysis for the oxygen stability and by Mössbauer spectroscopy for the hyperfine interactions around the Eu and Fe dopant ions.