Using the first-principles calculations within the Korringa–Kohn–Rostoker (KKR) method combined with the coherent potential approximation (CPA), the structural, optical and magnetic properties of rare-earth nitride Ho[Formula: see text]TM[Formula: see text]N doped with transition metal (TM) atoms (Ti, V, Cr, Mn, Co and Ni) are investigated as a function the generalized gradient approximation and self-interaction correction (GGA–SIC) approximation. The optical properties are studied in detail by using ab-initio calculations. Using GGA–SIC we have showed that the bandgap value is in good agreement with the experimental value. Using GGA–SIC approximation for HoN, we have obtained a bandgap of 0.9 eV. Some of the dilute magnetic semiconductors (DMS) like Ho[Formula: see text]TM[Formula: see text]N under study exhibit a half-metallic behavior, which makes them suitable for spintronic applications. Moreover, the optical absorption spectra confirm the ferromagnetic stability based on the charge state of magnetic impurities.