To understand the electronic structure and optical properties of Zn2SnO4 and Eu‐doped compounds, we utilized the full potential linearized augmented plane wave method with the generalized gradient approximation (GGA). To analyze the electronic, optical, and thermoelectric properties of Eu‐doped Zn2SnO4, we implemented the GGA‐PBE + U method within density functional theory. We obtained the density of states (total and partial DOS) and optical constants (absorption coefficient, refractive index, reflectivity, and optical conductivity). Our findings revealed that the near‐Fermi valence bands (VB) of the band structure are primarily due to the O and Eu atoms. The electronic properties, including the band structure and TDOS/PDOS, particularly the hybridization among Eu s and f along with Zn s and d states, demonstrated that the pristine material's VB and conduction bands are located at the G point, indicating a direct band gap. However, the Eu‐doped material exhibits intermetallic behavior. We used the electronic structures to analyze the dielectric (real and imaginary parts) function and related properties, such as absorption coefficient, reflectivity, energy loss function, and refractive index. Consequently, in the low‐energy zone, the refractive index and the dielectric constant increased. With the presence of impurity bands, the width of the band gap decreased significantly, and the absorption spectrum shifted toward the red region, indicating a robust response in the infrared band, with high utilization efficiency. Moreover, the Zn2SnO4‐doped samples showed the best improvement in optical properties in the low‐energy region.