In the present study, Fe3+ doped PVA capped CdSe nanopolymer has been synthesized by wet chemical method. Different spectroscopic techniques were used to understand the influence of Fe3+ ions on the structural, optical and luminescent properties of the nanopolymer. XRD pattern reveals the zinc blended cubic structure of CdSe and the average crystallite sizes is found to be 6 nm. The optical absorption spectrum exhibited the characteristic bands. Crystal field and Racah parameters were evaluated as Dq = 970, B = 950 and C = 3800 cm–1 . EPR spectrum exhibited two resonance signals at g = 2.02 and 4.31. Optical and EPR studies reveal the distorted octahedral site symmetry and moderately covalent bonding between the Fe3+ ions with the host lattice. PL spectrum shows the blue emission. FT-IR spectrum exhibited the characteristic bands of PVA in CdSe polymer and other functional groups