Transition metal (TM = Mn, Fe, Co, and Ni)-doped Ba0.85Ca0.15Ti0.9Zr0.1O3 (BCZT) lead-free ceramics with excellent optical and magnetic properties are synthesized via a solid-state reaction method. The effects of TM elements on the sintering, structure, optical, and magnetic properties of BCZT ceramics are investigated in detail. Structural phase transition from the coexistence of rhombohedral and tetragonal phases to a single rhombohedral phase is observed owing to grain refinement. A narrow band gap of 1.68 eV is achieved in the Co-doped BCZT. The optical absorption of TM-doped BCZT is enhanced, which is ascribed to the molecular orbital rearrangement caused by lattice distortion. Moreover the magnetic behaviors of TM-doped BCZT are observed. The Fe-doped BCZT presents the most evident ferromagnetism, resulting from the exchange coupling interaction between the Fe3+ ions and oxygen vacancies. These results provide additional insight into the use of TM-doped BCZT lead-free ferroelectric ceramics for various applications.