A novel multifunctional optical device, combining optical filtering, amplification, attenuation and switching functions in one unit, was designed and demonstrated in covering both C-and L-bands, by taking advantage of excellent electrooptic (EO) property in the gain media of 2.0 mol% Er doped and 2.0 mol%Er , 5.0 mol%Yb codoped lanthanum-modified lead zirconate titanate (PLZT) ceramics. In order to optimize the multifunctional device, the absorption and photoluminescence spectra and optical gain profiles of the core components-optically active ceramic variable waveplates were studied experimentally, along with the dielectric, optical, thermal and EO characterization of the typical non-memory ceramic plates. This work has paved a way leading to a broader spectrum of applications, specifically in constructing monolithic, array-and microchip-based devices and systems, with erbium and other rare earth doped PLZT ceramics as both gain media and electrically variable waveplates.