Nb and Fe co-doped PLZT (Pb0.97La0.02(Zr0.52Ti0.48)(1-2x) (Nb0.5Fe0.5)(2x) O-3 for x = 0.00, 0.02, 0.04, 0.06 and 0.08) samples have been prepared using sol-gel method. X-ray diffraction (XRD) and Raman spectroscopy studies confirmed that the samples are single phase even for the highest tested doping of 8 mol% of Nb and Fe. Incorporation of Nb and Fe atoms into PLZT lattice has been confirmed by XRD study where a systematic peak shift has been observed with increasing dopant concentration. The lattice parameters are found to decrease gradually with increase in Nb and Fe contents. From Raman spectroscopic investigation, redshift of several modes has been observed. Rietveld refinement has been performed to correlate XRD results with the fitting of Raman spectra. A total of 14 distinguished modes have been identified by de-convolution of Raman spectra, and they are in good agreement with the theoretically calculated modes for PbTiO3 and also with those reported on PZT and PLZT previously. The Burstein-Moss shift of absorption edge has been observed by diffuse reflectance spectroscopy experiment, and the analysis shows change in band gap from 3.21 eV (for x = 0.00) to 2.59 eV (for x = 0.08). The underlying mechanisms and the observed electronic behavior have been confirmed and analyzed by photoluminescence study which revealed several transitions and supported the effect of Nb and Fe co-doping as observed from XRD and Raman spectroscopy.