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Abstract The rational design of the electronic band structures and the associated properties (e.g. optical) of advanced materials has remained challenging for crucial applications in optoelectronics, solar desalination, advanced manufacturing technologies, etc. In this work, using first-principles calculations, we studied the prospects of tuning the absorption spectra of graphene via defect engineering, i.e. chemical doping and oxidation. Our computational analysis shows that graphene functionalization with single hydroxyl and carboxylic acid fails to open a band gap in graphene. While single epoxide functionalization successfully opens a bandgap in graphene and increases absorptivity, however, other optical properties such as reflection, transmission, and dielectric constants are significantly altered. Boron and nitrogen dopants lead to p- and n-type doping, respectively, while fluorine dopants or a single-carbon atomic vacancy cannot create a significant bandgap in graphene. By rigorously considering the spin-polarization effect, we find that titanium, zirconium, and hafnium dopants can create a bandgap in graphene via an induced flat band around the Fermi level as well as the collapse of the Dirac cone. In addition, silicon, germanium, and tin dopants are also effective in improving the optical characteristics. Our work is important for future experimental work on graphene for laser and optical processing applications.