Undoped and Y-doped NiFe₂O₄ nanoparticles were successfully synthesized by the simple co-precipitation method without any organic gelation agent. The appropriate annealing temperature and time to obtain single-phase spinel NiFe_2-xY_xO₄ (x = 0, 0.05, 0.1, and 0.15) is 800 °C for 1 h. The particle size measured from scanning electron microscope (SEM) and transmission electron microscope (TEM) images confirms the nanostructural character in the range of 20–40 nm. The crystallite size (D_XRD = 27.54–17.43 nm) decreased while the cubic lattice parameters (a = 8.2981–8.3510 Å) increased as the Y³⁺ content in nickel ferrite spinel increased. Undoped and Y-doped NiFe₂O₄ nanoparticles have strong optical absorption in the UV (λ = 200–400 nm) and visible (λ = 400–600 nm) ranges, together with significantly lower band gap energy (E_g) compared to the NiFe₂O₄ materials synthesized by the sol-gel and hydrothermal methods (E_g = 1.57–1.67 eV). All the undoped and Y-doped NiFe₂O₄ samples exhibited strong ferromagnetic behaviour with narrow magnetic hysteresis loop and high magnetization. An increase in the doped Y³⁺ ion in the NiFe₂O₄ spinel crystal lattice reduced the saturation magnetization (M_s = 84.33–28.25 emu/g) while at the same time increasing the coercivity (H_c = 69.74–23.46 Oe) and remanent magnetization of the obtained materials (M_r = 84.33–28.25 emu/g). In this manners, Y-doped NiFe₂O₄ nanopowders, with a narrow band gap and strong ferromagnetic behaviour, can be used as catalysts for photochemical reactions, as well as materials for transformer cores, magnetic conductors, and gas sensors.