Four groups of Mg:Fe:Cu:LiNbO₃ crystals with different [Li]/[Nb] ratios were prepared using the Czochralski method. The crystals were tested using infrared absorption spectroscopy (IR) to analyze ion occupation, and their optical birefringence performance was tested through two-wave coupling experiments. The crystals' resistance to optical damage was tested using the exposure energy flux threshold method. The results showed that when the [Li]/[Nb] ratio exceeded 1.20, the doped ions began to enter the Nb site. As the [Li]/[Nb] ratio increased, the optical birefringence performance and resistance to optical damage of the crystals gradually improved. When the [Li]/[Nb] ratio was 1.38, aside from an increase in grating erasure time, the writing speed, diffraction efficiency, sensitivity, dynamic range, and photoconductivity were all optimal. At this ratio, the Mg:Fe:Cu:LiNbO₃ crystal exhibited the best holographic storage performance.