The magnetic and optical properties of Ce-doped ZnO systems have been widely demonstrated, but the effects of different strains of Ce-doped ZnO systems remain unclear. To solve these problems, this study identified the effects of biaxial strain on the electronic structure, absorption spectrum, and magnetic properties of Ce-doped ZnO systems by using a generalized gradient approximation + U (GGA + U) method with plane wave pseudopotential. Under unstrained conditions, the formation energy decreased, the system became stable, and the doping process became easy with the increase in the distances between two Ce atoms. The band gap of the systems with different strains became narrower than that of undoped ZnO without strain, and the absorption spectra showed a red shift. The band gap narrowed, and the red shift became weak with the increase of compressive strain. By contrast, the band gap widened, and the red shift became significant with the increase of tensile strain. The red shift was significant when the tensile strain was 3%. The systems with −1%, 0%, and 1% strains were ferromagnetic. For the first time, the magnetic moment of the system with −1% strain was found to be the largest, and the system showed the greatest beneficial value for diluted magnetic semiconductors. The systems with −3%, −2%, 2%, and 3% strains were non-magnetic, and they had no value for diluted magnetic semiconductors. The ferromagnetism of the system with −1% strain was mainly caused by the hybrid coupling of Ce-4f, Ce-5d, and O-2p orbits. This finding was consistent with Zener's Ruderman–Kittel–Kasuya–Yosida theory. The results can serve as a reference for the design and preparation of new diluted magnetic semiconductors and optical functional materials.