Yttrium (III) oxide or so-called diyttrium trioxide (Y 2 O 3 ) is an excellent candidate ceramic material for optoelectronic applications. Structural, electrical conductivity, and dielectric relaxation properties of bulk yttrium (III) oxide are studied. X-ray diffraction (XRD) results indicate that the yttrium (III) oxide compound has a crystalline cubic phase. FTIR technique is used to ascertain the chemical structure of the yttrium (III) oxide compound. Impedance spectroscopy was used to analyze frequency-dependent electrical properties as a function of temperature in the range of 303–423 K and frequency range 0.1 Hz–2 MHz. Impedance spectroscopy parameters such as dielectric constant, dielectric loss, loss factor, electric modulus, and complex impedance of the yttrium (III) oxide compound have been studied. The Nyquist plot describes the complex impedance of the yttrium (III) oxide for different temperatures. The universal Jonscher’s power law was used for the analysis of the complex electrical conductivity of the yttrium (III) oxide compound. It is found that the real ( σ ′ ) and imaginary ( σ ˊ ˊ ) parts of the complex conductivity increase with increasing frequency. The exponent frequency (s) equals unity which confirms that the predominant conduction mechanism is a nearly constant loss (NCL) mechanism. DFT/TD-DFT studies using B3LYP/LanL2DZ level of theory were used to provide comparable theoretical data and electronic energy gap of HOMO→LUMO. Spatial plot of HOMO and LUMO of yttrium (III) oxide with their energy gap.