ABO3−ξ-type oxides have gained prominence because of their usefulness in gas separation, solid oxide fuel cell, gas sensor, etc. Of particular interest is barium and zinc substituted strontium ferrite – an alternative cathode material due to its high structural stability, accommodation of considerable anion deficiency, and good oxygen permeability. An attempt has therefore been made to synthesize Ba0.5Sr0.5Zn0.2Fe0.8O3−ξ powder by a novel oxalate sol–gel route to investigate its formation, nature of iron species, optical absorption, and impedance behaviour. The synthesis process involves gel formation, digestion for 6h, drying at 150 °C for 24h, and decomposition of oxalate at 950 °C for 15h in air. The product is shown to exhibit (i) a perovskite-type cubic phase with a = 3.975 ± 0.002Å, Z = 1, and space group Pm3m, (ii) Fe3+0.5 and Fe4+0.3 ions, (iii) oxygen deficiency parameter ξ ∼ 0.45, and (iv) optical absorption at ∼370 nm (∼3.4 eV) and ∼797 nm (∼1.56 eV) – arising due to charge transfer transition from O2−(2p) to Fe3+(3d) and octahedral crystal field splitting of iron t2g and eg orbitals, respectively. Moreover, the high impedance values observed below 10 kHz over a temperature range of 303–413K have been attributed to space charge polarization; activation energy of the relaxation process being 0.2eV. The motion of induced polarons is possibly responsible for the decrease of impedance with increase of temperature in the range 303–413K.