The two layer Aurivillius compound SrBi2Ta2O9 (SBT) and SrBi2-xDyxTa2O9 (x=0.025, 0.05, 0.1) was synthesized by using a solid state sintering method. The X-ray diffraction (XRD) analysis revealed that the dysprosium substituted ceramic SrBi2Ta2O9 have a pure two-layer Aurivillius type structure. The effects of Dysprosium oxide on the microstructure, ferroelectric, dielectric and optical properties of the ceramics were investigated. Dy doping is found to be significantly affect on the structural and physical properties of SBT. The dielectric constant (Ԑ) and transition temperature (Tc) of Dy-doped samples was found to be decrease with increase of Dy content. Well-developed P (polarization)-E (Electric field) hysteresis loops were observed for all the samples and also the band-gap (Eg) of this sample was verify by UV-VIS spectrophotometer.