Dysprosium-doped nickel-ferrite (NiFe1.925Dy0.075O4) thin films were fabricated using sputter-deposition using a stoichiometric bulk target prepared by the solid state chemical reaction. The structural, electrical and optical properties of NiFe1.925Dy0.075O4 thin films were studied in detail. The grain-size (L) and lattice-expansion effects are significant on the electrical and optical properties of NiFe1.925Dy0.075O4 films. Air annealing (Ta) at 450–1000 °C results in the formation of nanocrystalline NiFe1.925Dy0.075O4 films, which crystallize in the inverse spinel structure, with L = 5–40 nm. The lattice constant of NiFe1.925Dy0.075O4 increases compared NiFe2O4 due to Dy-doping. Electrical conductivity of NiFe1.925Dy0.075O4 films (at 300 K) decreases from 1.07 Ω−1 m−1 to 3.9 × 10−3 Ω−1 m−1 with increasing Ta (450 to 1000 °C). Conductivity was found to decrease exponentially with decreasing the temperature from 300 K to 120 K indicating the characteristic semiconducting nature of all the films. Band gap increases from 3.17 to 4.08 eV for NiFe1.925Dy0.075O4 films with increasing Ta from 450 to 1000 °C. A correlation between grain-size, electrical conductivity and optical band gap in nanocrystalline NiFe1.925Dy0.075O4 films is established.