YFeO3, YFe0.95Co0.05O3, Y0.95Gd0.05FeO3 and Y1-xGdxFe0.95Co0.05O3 (x = 0.0, 0.05, 0.10, 0.15 and 0.20) nanopowders were successfully fabricated via a low-temperature solid-state reaction technique. Results obtained using X-ray diffraction (XRD), scanning electron microscopy (SEM), and Raman spectra indicate that YFeO3 nanopowders with Gd3+ and Co3+ ions co-doping at Y and Fe-sites were fabricated at 800 °C in sizes below 50 nm, and a distorted structure was obtained. Magnetic hysteresis loop analyses illustrate that ferromagnetic behavior of YFeO3 nanopowders can be enhanced with the addition of Gd and Co. Whereas the maximum and remnant magnetization of the powders were found to be about 5.24 and 2.6 emu/g, respectively, the optical band gap was around 2.4 eV, proving that co-doped YFeO3 nanopowders have a strong capability to absorb visible light. Because both magnetic and optical properties of these materials are greatly improved with the addition of Gd and Co, one can expect the scope of their potential application in the magnetic and optical fields to increase.