Dysprosium-doped lead zirconate titanate thin films (PbDyx(Zr0.40Ti0.60)1−(3x/4)O3) (x = 0%, 1%, 2%, 3%, 4%, 5%), abbreviated as PDZT, were prepared by sol–gel method. The effects of Dy doping on the crystal orientation, microstructure, and electrical properties of lead zirconate titanate (PZT) films were studied. X-ray diffraction (XRD) analysis shows that PDZT thin films with Dy concentration less than 3% exhibit (111) preferred orientation, and the samples doped with 3%, 4%, and 5% show (100) preferred orientation. Scanning electron microscope (SEM) analysis results show that all samples exhibit dense perovskite structure. With the increase of doping content, the electrical properties of PDZT films show a trend of first increasing and then decreasing. An enhanced residual polarization strength of 60.89 μC/cm2 and an improved relative dielectric constant of 943.1 at 0.1 kHz are obtained in 2% doped PDZT film. Moreover, the PZT film with 2% Dy doped also exhibits a significantly reduced leakage current density.