The electronic structure and magneto-optic properties of TiO₂ (rutile) doped with two concentrations of rare-earth (RE) elements are explored using a first-principle all-electron full-potential augmented spherical-wave method based on the PBEsol–GGA approximation, to examine their potential use as a spintronic and optoelectronic system. The results predict that all compounds exhibit half-metallic character, the only exception is by doping with Nd or that the material is magnetic but the cloud is still a half-metallic magnet. We also found that the localized level at the Fermi energy shifts to lower energy as the atomic number of the 4f-element increases. Consequently, the mechanism that controls the ferromagnetism in these systems has been proposed according to this positioning. The energy of the localized level due to Gd is sufficiently low to lie at the top of the valence band, while Eu produces a midgap state. However, the Fermi level was not noticed precisely at the middle of the energy gap. In contrast, the impurity states of the Nd-, Pm-, and Sm-dopants are close to the bottom of the conduction band of the host system. This allows electrons to be delocalized, and gives a higher scattering cross-section. Interestingly, the analysis of optical absorption and electrical conductivity emphasizes that this ferromagnetic DMS based on rare-earth elements has the power to be a promising spintronic device for visible light absorption in solar cells. Finally, the relationship between the mechanism that controls the ferromagnetism and the absorption efficiency of visible light is discussed.