An array of water-soluble polymer blends composed of polyvinyl alcohol (PVA) and polyethylene glycol (PEG) have been synthesized by the solution casting technique. The prepared blends were tested using X-ray diffraction (XRD), differential scanning calorimetry, mechanical, optical, and dielectric measurements. According to the XRD studies, PEG has a significant plasticizing impact on PVA, as evidenced by the drop in crystallinity (Xc) values from 31.24 to 25.45%. The thermal study reveals the reduction in the glass transition temperature Tg from 89.2 to 60.6 °C. The outcomes showed that adding PEG affects the mechanical characteristics of PVA/PEG blends, and the ideal blend was one with 25 wt% of PEG loading, where the value of the percentage elongation at break (78%), Toughness (0.44) and surface energy (0.076) reached the highest values at this blend. Meanwhile, Young's modulus declined from 20.34 MPa for pure PVA to 7.07 MPa at 25 wt% PEG. According to the optical studies, the absorption edge shifted from 5.24 to 4.26 eV while the optical band gap ({{E}_{g}}^{ind}, {{E}_{g}}^{d}) decreased from 4.81, 5.46 eV (pure PVA) to 3.77, 5.04 eV (PVA/PEG30%) respectively, which indicates that forming charge transfer complexes between PVA and PEG polymer. The EU values enhanced from 0.238 to 1.296 eV and the refractive index improved from 1.38 to 2.97 when PEG content increased. The dielectric and conduction properties were studied from 100 Hz to 1 MHz. It was demonstrated that the dielectric constant ({varepsilon }{prime}) and dielectric loss ({varepsilon }{prime}{prime}) are highly frequency-dependent. In addition to that, ({varepsilon }{prime}, {varepsilon }{prime}{prime}) values improved from (30, 2) for PVA to (44.46 and 5.39) for PVA/30 wt% PEG blend at 100 Hz, respectively. At the same time, the AC electrical conductivity is improved by increasing the PEG content. These results will likely have far-reaching consequences across a variety of fields, the possible applications due to the increased flexibility of PVA film are flexible packaging, biomedical materials, and other industries that need adaptive and flexible materials. Furthermore, the improved refractive index of the PVA/PEG combination demonstrates its appropriateness for certain applications such as optoelectronic equipment, waveguides, anti-reflective coats, and LEDs. This blend has uses in charge storage devices, such as embedded capacitors due to the enhancement of dielectric constant. Finally, one can say that the research samples have multifunctional applications.