Oxygen vacancy engineering is one of the most effective strategies for tuning the microstructural properties of oxide nanomaterials. However, the connection between oxygen vacancies and electromagnetic (EM) wave absorption capacities is unclear. Herein, oxygen vacancy-boosted microwave absorption is realized over Gd-doped Ni0.5Co0.5Fe2O4 (NCFO) nanoceramics. All magnetic properties are studied with the influence of induced lattice strain. Except for Ni0.5Co0.5 Gd0.075Fe1.925O4 (NCFOG3), which has an elevated saturation magnetization (Ms) of 63 emu/g, the Ms decreases with increasing Gd content. In addition, remnant magnetization (Mr), coercivity (Hc), and anisotropic constant (K) increased until Ni0.5Co0.5 Gd0.050Fe1.95O4 (NCFOG2) and then declined. The EM wave parameters: dielectric permittivity (ϵ'), magnetic permeability (μ'), dielectric loss (ϵ''), and magnetic loss (μ'') are systematically examined and found in the ranges of 2.07–3.5, 1.73–4.7, (4 × 10-2) – (2.2 × 10-1) and 0.18–0.35 respectively. Our finding shows that a small amount of Gd favors the high oxygen vacancy concentration, an appropriate lattice defect, and high magnetic and dielectric losses. The possible mechanism for EM wave absorption revealed the largely localized electrons and dipole centers created by the numerous oxygen vacancies causing the multiple reflection and scattering, which enhanced conductive loss, defect, and dipole polarizations. The maximum reflection loss (RL) -28.37 dB is observed at 17.80 GHz of a 2 mm thick sample for NCFOG3. This research reveals a distinct link between oxygen vacancy defects and EM wave dissipation capability, providing important information for developing better EM wave absorbents.