Due to its unusual optical properties, neodymium ion (Nd³⁺)-doped bismuth silicate (Bi₄Si₃O₁₂, BSO) is widely used for its excellent medium laser amplification in physics, chemistry, biomedicine, and other research fields. Although the spectral transitions and luminescent mechanisms of Nd³⁺-doped BSO have been investigated experimentally, theoretical research is severely limited due to the lack of detailed information about the microstructure and the doping site of Nd³⁺-doped BSO, as well as the electric and magnetic dipole transition mechanisms. Herein, we systematically study the microstructure and doping site of Nd³⁺-doped BSO using an unbiased CALYPSO structure search method in conjunction with first-principles calculations. The result indicates that the Nd³⁺ ion impurity occupies the host Bi3+ ion site with trigonal symmetry, forming a unique semiconducting phase. Based on our newly developed WEPMD method, the electric dipole and magnetic dipole transition lines, including a large number of absorption and emission lines, in the region of visible and near-infrared spectra of Nd³⁺-doped BSO are calculated. It is found that the ⁴G5/2 → ⁴I9/2, ²H9/2 → ⁴I9/2, and ⁴F3/2 → ⁴I11/2 channels are promising laser actions of Nd³⁺-doped BSO. These findings indicate that Nd³⁺-doped BSO crystals can serve as a promising multifunctional material for optical laser devices. Copyright © 2018 American Chemical Society.