The 0.93(Na0.5Bi0.5)1–xSmxTiO3-0.07BaTiO3 multifunctional ceramics were prepared by solid-phase reaction method. The phase structure, microstructure, electrical and photoluminescent properties were systematically studied. With increasing x, the ceramics undergoes the phase transition from rhombohedral to tetragonal with some rhombohedral distortion, along with a reduced grain size and increased relative density. On the other hand, the Sm3+ doping enhances the electric-field driven reversible phase transition and domain size, and reduces the domain walls, thereby contributing to improved piezoelectricity and decreased depolarization temperature (Td) from 91 °C to 40 °C. Excellent piezoelectric properties of d33 = 213 pC/N and kp = 29.9% are achieved in the x = 0.010 ceramic. Under excitation (407 nm), the Sm3+-doped ceramic exhibits bright reddish-orange fluorescence at 564, 599, 646 nm and 710 nm. A polarization-induced enhancement of photoluminescence is obtained in BNBT-xSm ceramics with an improved relative intensity of emission band at 646 nm. These results indicate that Sm3+-doped BNBT ceramics show great potential in electro-optic integration and coupling device applications.