In this work we demonstrate the preparation of Na0.25K0.25Bi0.48Dy0.02TiO3 powder material. The material was synthesized via solid-state reaction by using TiO2, Bi2O3, Na2CO3, K2CO3 and Dy2O3 as precursor materials. These powders were ball milled in ethanol for 12 h, then dried and calcined at 850°C for 2 h. Subsequently, obtained powder was additionally milled in ethanol for additional 12 h, and finally sintered at 850°C for 4 h. Structural analysis was done by X-ray diffraction and showed tetragonal P4bm structure without impurities. Optical characterization including photoluminescence excitation and emission spectra and diffuse reflection measurements were performed. Emission spectra showed characteristic bands of Dy3+ ions with pronounced emissions originating from f–f electronic transitions. A dominant band in the blue region with maximum at around 477 nm originates from magnetic-dipole 4F9/2→6H15/2 transition, and another in the yellow region with maximum at around 574 nm originates from electric-dipole 4F9/2→6H13/2 transition. A small intensity higher energy band cantered at around 457 nm originates from 4I15/2→ 6H15/2 transition provides the possibility to use this type of emitting material as temperature sensor using the LIR method.