We report on synthesis and comprehensively characterizing of Zn0.3Ni0.7O@ZnO (Zn1.3Ni0.7O2) composite oxide. Powder x-ray diffraction confirmed the coexistence of ZnO and Zn0.3Ni0.7O phases. The composite exhibited an average crystallite size of 74 nm and lattice strain of 2.2 × 10−4, as determined by the Williamson–Hall method. Magnetization measurements across 10–320 K identified soft ferromagnetic behavior. AC conductivity studies revealed frequency-dependent conductivity in the 300–573 K range, governed by thermally activated hopping of Ni2+ electrons, and a transition from long–range to localized transport occurs at higher temperatures. Activation energies of 0.038 eV (300–453 K) and 0.348 eV (483–573 K) are determined from DC conductivity data. The dielectric permittivity (ε′) increased at low frequencies and high temperatures due to dipole, ionic, and electronic polarizations, followed by a decline with frequency. Dielectric loss (ε′′), interpreted via Maxwell–Wagner theory and Koop’s approach, yielded activation energies of 0.357 and 0.038 eV, and relaxation times of 2.85 × 10−6 and 6.2 × 10−3 s at higher and lower temperatures, respectively. Diffuse reflectance spectroscopy shows absorption bands corresponding to Ni2+ and Ni3+ in various coordination environments. This work provides valuable insights into the multifunctional behavior of Zn–Ni oxide nanomaterials.