The electronic structure and optical properties of monoclinic HfO2 (m-HfO2) and HfO2:Al2O3 alloys, from the density functional theory (DFT), are investigated. The calculated lattice parameters and optical properties of m-HfO2 are consistent with the experimental data. Upon alloying with Al2O3 (more than 25%), we observe that the bandgap of Hf-aluminate (HfAlO) increases. Moreover, some doping states in the top and bottom valence bands are induced, which enhance the visible absorption of HfO2. From the impedance spectroscopy analysis, it is observed that 90% of the Al2O3 content in HfO2 induces a reduction of oxygen vacancies (and ac conductivity) as well as an increase in the dielectric constant as compared to pure HfO2. In addition, from the J–V and C–V variations, both current density and capacitance voltage nonlinearities are reduced. The conduction mechanisms of HfO2 and HfAlO dielectrics are systematically investigated. According to the J–E plots, parameters like the optical dielectric constant and the effective barrier height are extracted. Results are consistent with the DFT calculations and show that the Hf0.1Al0.9O device may constitute a potential candidate for metal–insulator–metal capacitor applications.