Polycrystalline Bi1−xEuxFeO3 (x=0.00–0.25) ceramics were synthesized by the solid state reaction method with the rapid liquid phase sintering process. The effects of Eu substitution on the structure, and ferroelectric and magnetic properties of BiFeO3 ceramics were investigated. X-ray diffraction measurements reveal that the structure of BiFeO3 was changed from rhombohedral to orthorhombic and the impurity phases were decreased both due to Eu substitution. Raman spectra results also confirm that a structure transition occurs in the Eu concentration range of 0.15–0.20. The SEM investigation has suggested that the Eu substitution hinders the grain growth. Vibrating sample magnetometer measurements indicate ferromagnetism in Eu-substituted BiFeO3 ceramics. It is found that the room temperature magnetic moment increases with increasing Eu concentration due to the suppressed or broken cycloid spin structure. Ferroelectric measurements show that Eu substitution enhances the polarization due to the significant decrease of the electric leakage of the samples. Therefore, the Eu-substituted BiFeO3, or more complicated substituted BiFeO3 based on Eu substitution, will have great potential for many practical applications.