We report a detailed study on the structural, microstructural, piezoelectric, dielectric and AC conductivity of Bi0.5(Na1−xK x )0.5TiO3 (BNKT; x = 0, 0.1, 0.2 and 0.3) ceramics fabricated by a conventional solid-state reaction method. XRD and Raman analysis revealed that Bi0.5(Na0.8K0.2)0.5TiO3 and Bi0.5(Na0.7K0.3)0.5TiO3 ceramics exhibit a mixture of rhombohedral and tetragonal structures. The segregation of K at the grain boundary was confirmed by transmission electron microscopy and is related to typical microstructural local compositional mapping analysis. Two transitions, at ∼ 330°C and 150°C, observed from the e′ versus T curve in pure BNT are associated with the ferroelectric tetragonal to paraelectric cubic phase (TC) and ferroelectric rhombohedral to ferroelectric tetragonal phase (Td), respectively. Further, the TC and Td shifted towards the lower temperature with a rise in K concentration. Frequency dispersion of Td and TC suggest that BNKT ceramics exhibit a weak relaxor behavior with diffuse phase transition, which is confirmed by Uchino–Nomura criteria and the Vogel–Fulcher law. The AC resistivity ρac(T) follows the Mott variable range hopping conduction mechanism. A significant enhancement of dielectric and piezoelectric properties were observed for x = 0.2 system: dielectric constant (e′ = 1273), dielectric loss (tanδ = 0.047) at 1 kHz, electromechanical coupling coefficients (k ij : k33, k t ∼ 60%, k31 ∼ 62% and kp ∼ 46%), elastic coupling coefficients ( $$ S_{33}^{D} $$ = 6.40 × 10−13 m2/N and $$ S_{33}^{E} $$ = 10.06 × 10−13 m2/N) and piezoelectric constants (d33 = 64.23 pC/N and g33 = 5.69 × 10−3 Vm/N).