The performance of KNbO$_3$, as a photorefractive crystal in the visible region, can be dramatically improved when impurities are incorporated into the host by doping. These materials lead to improvements in numerous technological applications such as optical data storage and phase conjugate mirrors. In this dissertation, KNbO$_3$ doped with various 3$d$ transition metals {em e.g.} Cr, Mn, Fe, Co and Ni, are investigated, with the long-term goal of extending the spectral range of the photorefractive KNbO$_3$ into the IR region. The electronic structure studies based on Density Functional Theory, described in this dissertation, has resulted in identifying definite trends in the impurity levels that could be explained in terms of crystal field and exchange field splitting. Different types of Fe impurity centers with coordinating and non-coordinating oxygen-vacancies have also been investigated. These results provide useful insights into the nature of the reduction center Fe$^{3+}$ to Fe$^{2+}$, which has been found to be a key contributor to a significantly enhanced photorefractive performance.