AbstractThis work reviews new ideas developed in the last two decades which play a key role for understanding the optical properties of insulating materials containing transition metal (TM) cations. Initially, this review deals with compounds involving d4 and d9 ions where the local structure of the involved MX6 complexes (M=dn cation, X=ligand) is never cubic but distorted, a fact widely ascribed to the Jahn‐Teller (JT) effect. Nevertheless, that assumption is often wrong as the JT coupling requires an orbitally degenerate ground state in the initial geometry a condition not fulfilled even if the lattice is tetragonal. For this reason, the equilibrium geometry of d4 and d9 complexes in low symmetry lattices, is influenced by two factors: (i) The effects, usually ignored, of the internal electric field, ER, due to the rest of lattice ions on the active electrons localized in the MX6 unit. (ii) The existence of structural instabilities driven by vibronic interactions that lead to negative force constants. As first examples of these ideas, we show that the equilibrium structure, electronic ground state of KZnF3:Cu2+, K2ZnF4:Cu2+ and K2CuF4 obey to different causes and only in KZnF3:Cu2+ the JT effect takes place. These ideas also explain the local structure and optical properties of CuF2, CrF2 or KAlCuF6 compounds where the JT effect is symmetry forbidden and those of layered copper chloroperovskites where the orthorhombic instability explains the red shift of one d−d transition under pressure. In a second step, this review explores stable systems involving d3, d5 or d9 cations, where the internal electric field, ER, is responsible for some puzzling phenomena. This is the case of ruby and emerald that surprisingly exhibit a different color despite the Cr3+‐O2− distance is the same. A similar situation holds when comparing the normal (KMgF3) and the inverted (LiBaF3) perovskites doped with Mn2+ having the same Mn2+‐F distance but clearly different optical spectra. The role of ER is particularly remarkable looking for the origin of the color in the historical Egyptian Blue pigment based on CaCuSi4O10.