AgBr crystals containing impurity Rh2+ with and without a next nearest neighbor silver vacancy (VAg) in the [001] axis are theoretically studied. The defect structures, bandgap, Mulliken charge, density of states, ultraviolet-visible (UV-Vis) and electron paramagnetic resonance spectra are analysed for two distinct (i.e. tetragonally elongated and compressed) centres by using density functional theory calculations. The results demonstrate that the structural, photoelectric and spectroscopic properties of AgBr are significantly changed after Rh substitution. The covalency of Rh-Br bonds in the two centres is stronger than that of pure AgBr according to the larger magnitudes of the overlap population. Compared to pure AgBr, Rh doping also results in significantly enhanced red shifts of absorption bands in the UV-Vis region and some new d-d transitions in the visible and near-infrared regions. Meanwhile, the bandgap of Rh-doped AgBr is about 10 % narrower than that of pure AgBr. As a result, the visible light activity may be enhanced in AgBr:Rh systems. Rh dopants can induce the magnetic moments of about 1.73 μB for both centres. Therefore, transition-metal Rh dopants may effectively modulate the electronic, optical and magnetic properties of AgBr.