In this work, we present a study of the structural, optical, ferroelectric and dielectric properties of BaTiO3 doped with diluted quantities of Fe3+ (x = atomic fraction; x = 0, 0.01, 0.02, 0.04; BaFexTi1-xO3). Pure and doped BaTiO3 were prepared through mechanical milling and conventional solid-state reaction methods. The XRD analysis revealed the formation and progressive increase of a hexagonal phase with the addition of Fe3+. Furthermore, the microstructure and morphology demonstrated to be highly sensitive to the incorporation of Fe3+, observing an important refinement of the grain size. The optical band gap remained almost unchanged with the addition and increase of Fe3+. The ferroelectric performance was severely affected by the incorporation of dopant, deteriorating the remnant polarization from an initial value of 9.42 μC/cm2 for pure BaTiO3 to 0.2 μC/cm2 for the sample with the largest content of dopant. On the other hand, the Curie temperature showed a continuous reduction with the increase of dopant from 132 °C in the pure BaTiO3 to 71 °C for the sample with the largest amount of dopant. Likewise, the incorporation of Fe3+ caused a reduction of the relative permittivity and the evolution of the ferroelectric-paraelectric transition from a conventional Curie-Weiss behavior to a partial diffuse transition.