In the present work, the effect of Zn substitutionon the structural, electrical, and magnetic properties of Zn-substituted double-layered manganite with La2.01Sr0.99Mn2-xZnxO7 \((x=0 and 0.2)\) formula has been investigated. Both compounds were synthesized using the solid-state reaction method. The X-ray diffraction analysis, based on the diffractograms refinement, reveals that both samples crystallize in a tetragonal structure with an I4/mmm space group with a notable increase in the cell parameters and a decrease in crystallite size upon substitution. A decrease in the grain sizes is observed through the analysis of scanning electron microscope images. The electrical resistivity investigation, using the four-probe technique, indicates that both compounds exhibit metal–insulator transition TMI, which shifted to lower temperatures with 10% Zn substitution, accompanied by a considerable increase in resistivity. The resistivity fitting curves revealed that the electrical conduction is governed by a combination of the residual, weak localization, and electron–electron interactions at \(T< {T}_{MI}\) , whereas at \(T>{T}_{MI}\) , it is governed by two models: adiabatic small polaron hopping (ASPH) above \({\theta }_{D}/2\) and 3D-Mott’s variable range hopping (VRH) below it. A slight improvement in the obtained magnetoresistance was observed in the substituted sample at \(T<59 K\) . Density of state, mean hopping distance \({R}_{h},\) and mean hopping energy \({E}_{h}\) were determined and discussed. The magnetic investigation revealed a decrease in the Curie temperature with substitution from 335 to 212 K, and the appearance of the Griffiths phase. Magnetization measurements as a function of magnetic field revealed the presence of the ferromagnetic state at 5 K for both samples. At room temperature, the parent sample remains in ferromagnetic state, while the substituted one changes to a paramagnetic state. The present findings demonstrate that Zn doping modifies double exchange and the metal–insulator transition, enhancing magnetoresistance and providing insights for low-temperature magnetic sensor applications and layered manganite physics.