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Abstract In this report, the effect of rare-earth (RE3+) ion substitution on structural, microstructural, and electrical properties in barium bismuth titanate (BaBi4Ti4O15) (BBTO) Aurivillius ceramics has been investigated. The Rietveld refinements on X-ray diffraction (XRD) patterns confirm that all the samples have an orthorhombic crystal system with A21am space group. Meanwhile, temperature dependent synchrotron XRD patterns reveal that the existence of dual phase in higher temperature region. The randomly oriented plate-like grains are experimentally strived to confirm the distinctive feature of bismuth layered Aurivillius ceramics. The broad band dielectric spectroscopic investigation signifies a shifting of ferroelectric phase transition (Tm) towards low temperature region with a decrease of the RE3+-ionic radii in BBTO ceramics. The origin of diffuse ferroelectric phase transitions followed by stabilization of the relaxor ferroelectric nature at high frequency region is explained using suitable standard models. The temperature dependent ac and dc conductivity results indicate the presence of double ionized oxygen vacancies in BBTO ceramics, whereas the dominance of single ionized oxygen vacancies is observed in RE-substituted BBTO ceramics. The room temperature polarization vs. electric field (P–E) hysteresis loops are shown to be well-shaped symmetric for BBTO ceramics, whereas slim asymmetric ferroelectric characteristics developed at RE-substituted BBTO ceramics.