In this present investigation, nanoparticles of B-site disordered Y2FeCrO6 (YFCO) double perovskite have been successfully synthesized for the first time by optimizing synthesis steps and temperatures of facile sol-gel technique to investigate their structural, magnetic, and optical properties. The Rietveld refinement of the X-ray diffraction pattern of YFCO nanoparticles revealed a single-phase orthorhombic structure with pbnm space group. The average size of the nanoparticles is around 67±15 nm determined by both field emission scanning electron microscopy and transmission electron microscopy imaging. The existence of mixed valence states of Fe and Cr ions was confirmed by X-ray photoelectron spectroscopy which is an indication of the absence of proper B site long range ordering. The temperature dependent magnetization curves demonstrated negative magnetization of this double perovskite material with compensation temperature at around 170 K. The field-dependent magnetic hysteresis loops exhibited the coexistence of weak ferromagnetic and antiferromagnetic domains in YFCO nanoparticles. The exchange bias effect was observed below Néel temperature which is tunable by a cooling magnetic field. The UV–visible spectroscopy ensured that YFCO nanoparticles have a direct band gap of ∼ 1.90 eV, which was further confirmed by steady-state photoluminescence spectroscopy. This B-site disordered YFCO might enhance interest on basic fundamental research on disordered rare-earth and transition metal-based perovskite systems and can be used for spintronics as well as photocatalytic applications because of its favorable magnetic and optical properties.