In this paper the electronic structures and optical properties of Cu:Fe:Mg:LiNbO₃ crystals and their comparative groups are investigated by first-principles based on the density functional theory to explore the characteristics of charge transfer in crystals and analyse the parameters of the two-colour holographic storage technology based on optical properties of crystals. The basic crystal model is built as a supercell structure 2 × 2 × 1 of near-stoichiometric pure LiNbO₃ crystal with 120 atoms, including 24 Li atoms, 24 Nb atoms and 72 O atoms. Above that the five doped crystal models are established as follows: the copper doped LiNbO₃ crystal (Cu:LiNbO₃), the ferri doped LiNbO₃ crystal (Fe:LiNbO₃), the copper and ferri co-doped LiNbO₃ crystal (Cu:Fe:LiNbO₃), the copper, ferri and magnesium tri-doped LiNbO₃ crystal (Cu:Fe:Mg:LiNbO₃) with doping ions at Li sites, and the copper, ferri and magnesium tri-doped LiNbO₃ crystal (Cu:Fe:Mg(E):LiNbO₃) with ferri ions at Nb sites and magnesium ions at both Li sites and Nb sites. The last two models represent the concentration of Mg ions below the threshold (~6.0 mol%) and over the threshold respectively. The charge compensation forms are taken successively as $\small {{\rm{Cu}}_{\rm{Li}}^+}\text-{\rm{V}}_{\rm{Li}}^-$, $\small {{\rm{Fe}}_{\rm{Li}}^{2+}}\text-{2\rm{V}}_{\rm{Li}}^-$, ${{\rm{Fe}}_{\rm{Li}}^{2+}}\text-{\rm{Cu}}_{\rm{Li}}^+ \text-{3\rm{V}}_{\rm{Li}}^- $, ${{\rm{Mg}}_{\rm{Li}}^{+} \text-{\rm{Fe}}_{\rm{Li}}^{2+}}\text- $${\rm{Cu}}_{\rm{Li}}^+\text -{4\rm{V}}_{\rm{Li}}^-$ and ${{\rm{3Mg}}_{\rm{Li}}^{+}}\text-{\rm{Mg}}_{\rm{Nb}}^{3-}\text-{\rm{Fe}}_{\rm{Nb}}^{2-} \text-{2\rm{Cu}}_{\rm{Li}}^+$in doped models. The results show that the extrinsic defect levels within the forbidden band of Cu:LiNbO₃ crystal and Fe:LiNbO₃ crystal are mainly contributed by the 3d orbits of Cu ions and the 3d orbits of Fe ions respectively. The forbidden band widths are 3.45 eV and 3.42 eV respetively in these two samples. In Cu:Fe:LiNbO₃ crystal, the impurity levels are contributed by the 3d orbits of Cu and Fe ions; the forbidden band width is 3.24 eV; the absorption peaks are formed at 1.36, 2.53, and 3.01 eV. The Cu:Fe:Mg:LiNbO₃ and Cu:Fe:Mg(E):LiNbO₃ crystal presentthe forbidden band width of 2.89 eV and 3.30 eV respectively; the absorption peaks are formed at 2.45, 1.89 eV and 2.89, 2.59 eV, 2.24 eV, respectively. In Cu:Fe:Mg:LiNbO₃crystal, the weak absorption peak at 3.01 eV disappears, beacause of the superposition of the red-shifted absorption edge and the next bigger peak. The peak locations move slightly, which can be explained by the crystal field changing under the different doping concentrations and the different occupying positions of doping ions. In Cu:Fe:Mg(E):LiNbO₃ crystal, the absorption peak near 2.5 eV is stronger than that of the other tri-doped crystal, which may be caused by the deference in occupancy among Fe ions. The peak at 2.9 eV can be chosen as erasing light, and the peak at 2.5 eV as write and read light in the two-center nonvolatile holography. The tri-doped crystal with Mg²⁺ concentration over the threshold shows obvious absorption peak at 2.9 eV and stronger absorption at 2.5 eV, which is beneficial for this application. The strong absorption of write light can shorten the time to reach the saturation of diffraction efficiency, then increase the dynamic range (M/#) and the sensitivity (S). Meanwhile, in this Mg doping condition, write time can be shortened, so optical damage can be weakened, and finally the image quality can be optimized.