Bismuth oxychloride (BiOCl) nanocomposite powders doped with nickel ions were synthesized by sol–gel route using bismuth carbonate. The study focused on the determination the essential conditions required to create stable room-temperature ferromagnetic (RT-FM) properties in host BiOCl crystalline medium by means of doping with Ni 2+ ions (BiOCl:Ni). This work was based on the following ideas; the presence of Ni 2+ dopant impurity ions in BiOCl crystalline lattice could support the dissociation of H 2 molecules during the hydrogenation process that can develop the crystalline–electronic medium (CEM) of BiOCl for carrying out the spin–spin (S.S) long-range interaction between dopant Ni 2+ ions and thus create FM properties. Structural, optical, and magnetic properties of pure and Ni-doped BiOCl nanocomposite samples were systematically investigated. The structural properties were studied by X-ray diffraction (XRD) method. The optical properties were investigated by diffuse reflection spectroscopy (DRS). The study disclosed the conditions necessary to create RT-FM properties in hydrogenated BiOCl:Ni nanopowders. The physical explanations and discussions were given in the framework of bound magnetic polaron (BMP) theory. Thus, BiOCl nanocrystalline powder could be used as a potential candidate for optical applications with tailored magnetic properties. © 2019, Springer-Verlag GmbH Germany, part of Springer Nature.