Structural, optical, temperature dependent magnetic and electrical properties have been investigated for the nanocrystalline NiFe1.97RE0.03O4 (RE = La3+ and Sm3+) compound. Without any signs of a secondary REFeO3 phase, the Rietveld refinement reveals a single-phase spinel structure possessing cubic symmetry for current samples. The decrease in lattice constant has been observed as a result of RE ions substitution. The TEM micrographs reveal nanosized particles with an average size of 35 ± 3 nm and 32 ± 3 nm for La3+ and Sm3+ substituted samples. EDX spectra of both samples show good compositional homogeneity. HRTEM micrographs of both samples show well resolved lattice fringes and their inter-planar spacing matches with that obtained from the Rietveld analysis of the XRD patterns. The concentration of Fe2+ and Fe3+ ions has been estimated from the XPS spectra analysis and it is found to be ∼ 22% and 78% for NiFe1.97La0.03O4 and, 20% and 80% for NiFe1.97Sm0.03O4 compound. The optical energy band gap for rare earth substituted samples is found to be more than that of pure nickel ferrite. The value of saturation magnetization (Ms) and magneto-crystalline anisotropy constant (K1) estimated from the “Law of Approach to Saturation” equation for rare earth substituted samples are found to be less than that of pure nickel ferrite. However, an enhanced value of coercivity has been observed with RE substitution. ZFC (zero field cooling) and FC (field cooling) DC magnetization curves measured at 100 Oe in the temperature range of 60–400 K reveal a combination of weak and intermediate forms of magnetic interaction between the particles for both samples. Temperature dependent analysis of saturation magnetization and coercivity employing modified Bloch’s law and Kneller’s relation supports the nanomagnetic behavior of both samples. Under an AC magnetic field of 14.92 kA/m and frequency 337 kHz, the SAR and ILP values have been found to be ∼ 331 W/g and 4.22 nHm2/kg for NiFe1.97La0.03O4 and, ∼ 241 W/g and 3.21 nHm2/kg for NiFe1.97Sm0.03O4. The dielectric relaxation data have been analyzed at various temperatures ranging from 40 to 300 0C over the frequency range 100 Hz-1 MHz using electrical impedance spectroscopy. The dielectric constant for rare earth substituted samples is found to be more and their AC conductivity is observed to be less than that of pure nickel ferrite. The analysis of temperature dependent AC conductivity employing Jonscher’s power law suggests that the charge carrier’s conduction mechanism of both samples follows the small polaron hopping mechanism below 200 0C, thereafter; it follows the correlated barrier hopping mechanism. The activation energy estimated by imaginary impedance spectra is found to be 0.411 eV and 0.398 eV for NiFe1.97La0.03O4 and NiFe1.97Sm0.03O4 which is more than that of pure nickel ferrite. The Cole-Cole plots at different temperatures suggest the presence of non-Debye-type relaxation. The modeling of Cole-Cole plots with equivalent circuits for both samples confirms the contribution of both grain and grain boundary in electrical conduction. The estimated stretching exponential factor by fitting the modified KWW (Kohlrausch-Williams-Watts) equation to the imaginary modulus curve reveals relatively more dipole-dipole interaction in NiFe1.97Sm0.03O4 than that of the La3+ substituted sample.