The manipulation of composition and pressure, which affect the structure and, as a result, lead to new desired properties, is particularly significant for optimizing device performance. By considering the importance of pressure treatment, this study explores bandgap engineering and tuned optical responses of the ternary Cd0.25Zn0.75S alloy over a pressure range of 0–20 GPa using density functional theory. The functional material exhibits cubic symmetry at all pressures, and its bulk modulus increases with pressure. It is a direct bandgap semiconductor at Γ symmetry point, and its bandgap energy increases from 3.35 eV to 3.86 eV with an increase in pressure. Optical properties change with pressure, such that the absorption coefficient increases and absorbs near-ultraviolet light, while the static dielectric constant and static refractive index both increase with pressure. The effects of pressure on other optical parameters such as dielectric constant, extinction coefficient, refractive index, optical conductivity, and reflection are also explored. These findings provide significant theoretical guidance for the use of the Cd0.25Zn0.75S semiconductor in fabricating optoelectronic and photovoltaic devices functioning at varying pressure ranges and altitudes.