The requirement for electromagnetic interference (EMI) shielding materials have been increased in the last few years due to the extensive usage of portable communication/wireless devices. These devices radiate harmful electromagnetic waves; hence it is imperative to explore suitable materials to protect human health from the radiation. In this study, Dy substituted lithium ferrite/carbon black (LiFe5-xDyxO8/CB) composites have been developed for better shielding efficiency. The effect of Dy on structural, microstructural, and magnetic responses is studied systematically. The fluctuations in the lattice constant are attributed to the differences in the ionic radius of Dy and Fe. The addition of Dy caused the inhibition of grain growth and the formation of irregular grains. The saturation magnetization is also enhanced with an increase in Dy concentration up to x = 0.1 (LD10FO/CB) and then decreased after that Neels’ sublattice model interprets the variation in magnetization and the effective magneto crystalline anisotropy is analyzed. The EMI shielding effectiveness (SE) due to absorption and the reflection is enhanced by incorporating Dy (in the X- and Ku- bands). A maximum SE of 26 dB is observed for x = 0.1 compositions. It is noticed that absorption is the dominant mechanism rather than reflection. The highest absorption coefficient (Aeff) of 99.6% is achieved for LD10FO/CB in the range of 17–18 GHz. The values of complex permittivity and permeability for LD10FO/CB are in the range of (20–40) and (2–6), respectively. The incorporation of Dy (rare earth ion) in spinel ferrite led to promote 4f − 3d coupling along with 3d − 3d, which helped to enhance the magnetic and electrical properties. The results demonstrate that such ceramics can be used as a commercial microwave absorber.