Sr₂SiO₄ ∶ Eu³⁺ shows orange-red emission of Eu³⁺ substitutively present in two different Sr sites. The light-induced spectral changes from orange-red sharp line emission to yellow-white broad band are observed in Sr₂SiO₄ ∶ Eu at room temperature under irradiation with short UV or X-rays. The spectral changes are attributed to the optically assisted reduction of Eu³⁺ → Eu²⁺. The photoreduced Sr₂SiO₄ ∶ Eu shows emission containing contributions from both Eu²⁺ and Eu³⁺ in comparison to chemically reduced samples. This is explained on the basis of preferential reduction of Eu³⁺ present in Sr(1) sites under irradiation due to unsatisfied Eu_Sr–O–Si bonds. The absence of photoactivity for Ba₂SiO₄ ∶ Eu³⁺ (space group = Pnam) as well as Ca₂SiO₄ ∶ Eu³⁺ (space group = P2₁/n) indicates that crystal structure plays an important role in the photoreduction of Sr₂SiO₄ ∶ Eu³⁺ because of the prevailing orientational as well as the positional disorder in the latter. Further, the orientationally disordered monoclinic random domains persist within the orthorhombic lattice of Sr₂SiO₄, resulting in the positionally disordered Sr atoms and orientationally disordered SiO₄ tetrahedra. Electron paramagnetic resonance studies confirm the electron trapping by dynamically disordered (SiO₄)⁴⁻ under high energy photon illumination resulting in the formation of radical anion (SiO₄)⁵⁻. The substitutional studies indicate that the [Eu³⁺ ← O²⁻] charge-transfer (CT) state is directly involved in the photoreduction process. The excitation of Sr₂SiO₄ ∶ Eu³⁺ produces the [Eu³⁺ ← O²⁻] CT state which relaxes and transfers electrons to SiO₄ groups due to optically assisted rearrangement of local environment and mediates the electron transfer process to cause photoreduction of Eu³⁺ to Eu²⁺. The yellow emission is stable at room temperature and reverts to red on annealing at elevated temperature in Ar atmosphere due to thermally activated detrapping of charge carriers present at the defect centers which, in turn, convert Eu²⁺ to Eu³⁺. The thermally activated conversion of Eu²⁺ → Eu³⁺ in Sr₂SiO₄ is optically reversible, thereby resulting in a highly efficient material for application as an optical storage medium.