In this work, pure ZnO and Dy-doped ZnO nanopowdres (NPs) with varying doping concentration of Dy from 1 to 5 % were successfully synthesized by the co-precipitation method. The effect of Dy doping on the structure, morphology, optical and electrical conductivity of ZnO has been studied. XRD analysis shows that Dy-doped ZnO nanostructures exhibit primary wurtzite structure and a cubic Dy2O3 secondary phase. The average crystallite sizes were found to be 20.14 nm for pure ZnO and in the range of 24–33 nm for Dy-doped NPs. Crystallite size of Dy-doped ZnO NPs increases with increasing Dy concentration from 1 % to 3 % and then decreases as Dy increases. The decrease in crystallite size was explained by the formation of Dy-O-Zn bonds on the surface of ZnO. Lattice parameters (a and c) and unit cell volume (V) decrease as Dy content is initially increased up to 2 % then increase for further increase in Dy content. The initial decrease in a, c and V is due to strain relaxation stresses resulting from the formation of Dy2O3 secondary phase. FTIR spectra indicate the formation of the secondary phase and confirm the successful incorporation of Dy3+ ions into Zn2+ sites in ZnO structure. Optical band gap of pure and Dy-doped ZnO nanoparticles was evaluated from diffuse reflectance spectroscopy (DRS) spectra and found to be reduced in Dy-doped samples. Optical band gap decreases from 3.269 eV to 3.226 eV for the 1 % Dy-doped sample then increases on further increasing Dy concentration up to 4 % (3.252 eV) and slightly decrease again at 5 % (3.247 eV). PL emission spectra of Dy-doped samples, show the enhancement of the orange-red emission and the appearance of emission band at around 580 nm which may be assigned to the electrical dipole transition of Dy3+ ions. The electrical conductivity was enhanced by increasing Dy concentration up to an optimum doping concentration of 4 %, then decreases significantly due to scattering of charge carriers caused by the excess of the secondary phase on the surface of ZnO nanoparticles.