The synthesis-dependent structural-optical characteristics of nanomaterials have induced the critical optimization of parameters for nanoparticle synthesis. Considering the potential applications of yttria (Y2O3) in high-temperature IR windows and electro-optic devices, the present study describes the preparation of yttria nanopowders (YNPs) through co-precipitation method. Some special morphological and opto-electrical properties have been observed with a change in the precipitating agent concentration (R = NH5CO3/Y3+ = 1.5–5.5) without using any surfactant. Rietveld refinement confirmed the body-centered cubic (Ia-3 space group) structure of YNPs. Surface functionalities have been determined by Fourier transform infrared (FTIR) spectroscopy. Electron microscopy results confirmed the formation of agglomerated YNPs with R-dependent morphological modifications from flake-like shape to pseudo-spherical and rod-like particles. UV–visible and fluorescence (FL) spectroscopy confirmed the R-dependent optical absorption and emission (indigo, blue and green) characteristics. The dielectric measurement also confirmed the R-dependent variation in the dielectric constant values in the lower frequency range.