We report on the structural, optical and dielectric characterization of solid state derived, pseudo-cubic nanoscale barium titanates (BTs) with gadolinium (Gd3+) as substitutional dopant. Referring to X-ray diffractograms, apart from the BT peaks related to perovskite structure, the non-existence of any additional peaks due to byproducts has revealed that Gd3+ has undergone substitutional doping into the BT host lattice. The well-separated BT nanoparticles of typical size ∼10–15 nm were observed through electron microscopy studies. Following a direct, allowed type carrier transition (n=1/2), a reduction in the optical band gap value (from 3.28 to 3.255 eV) was observed when the Gd-doping level was varied within 0–7 %. Conversely, the Urbach energy followed an increasing trend, from a value of 0.741 to 1.879 eV. Furthermore, the dielectric constant showed a decreasing tendency with doping content and with increasing frequency. However, in the low-frequency region, the loss tangent (tanδ), which is the combined result of orientational polarization and electrical conduction, was found to be quite high in the doped samples as compared to their un-doped counterpart. The frequency-dependent electrical data were also analyzed in the framework of conductivity and impedance formalisms. In particular, the ac conductivity which varies as ∼ω s approaches ideal Debye behavior (s→1) for a low Gd level and a higher doping concentration did not show improved dielectric feature of the host. The incorporation of rare-earth (Gd3+) ions into the BT host system could greatly manifest dielectric relaxation and carrier conduction mechanisms, in a given frequency range, and thus can find immense scope in miniaturized nanoelectronic elements including ceramic capacitors and transducers.