Polycrystalline dysprosium (Dy) doped lanthanum zirconate-titanate (PLZT) ceramics with compositional formula [Pb0.88 (La1-xDyx)0.12][(Zr0.40 Ti0.60)0.96O3] (PLDZT) were prepared by hot-pressed solid-state ceramic method. The influence of Dy3+substitution on phase structure, microstructure, optical property and electro-optical property of the materials was investigated and analyzed. When the doping amount x was 0.1, the optical transmittance of the PLDZT sample reached the maximum value, and the electro-optical effect of the sample transformed from linear effect to quadratic effect. A high quadratic electro-optical coefficient of 5.59×10-16 m2/V2 was examined. To obtain a same variation of di-refractive index Δn, the applied voltage of the PLDZT (x=0.1) sample was decreased obviously.