Mg-doped BiFeO3 (Bi1−xMgxFeO3 (0.00 ≤ x ≤ 0.15)) nanoparticles (NPs) have been successfully prepared by simple solution combustion method using urea as fuel. The obtained product was sintered at 550 °C for 2 h to get pure-phase formation. The as-prepared samples were characterized by powder X-ray diffraction (XRD), Fourier transform infrared (FT-IR), field emission scanning electron microscopy (FE-SEM), energy-dispersive X-ray spectroscopy (EDX), transmission electron microscope (TEM), ultraviolet–visible (UV-Vis) absorption, photoluminescence (PL) spectra, and vibrating sample magnetometer (VSM) analysis. Powder XRD study revealed that all products exhibit rhombohedral structure with pure-phase formation. The average crystallite size of the samples decreased from 56.25 to 46.15 nm with increasing the concentration of Mg (x = 0.00, 0.05, 0.10, and 0.15). Surface morphology of the samples were analyzed by FE-SEM and TEM micrograph techniques, and the grain distribution was not quite homogeneous and observed agglomeration of the particles, which is mainly due to the magnetic interaction among them. EDX analysis confirmed the presence of Bi, Fe, O, and Mg elements without any form of impurity peak in all products. PL spectra shows a high intense peak at 464 nm, which is attributed to blue emission. The saturation magnetization is enhanced with increasing Mg doping level at RT. Antibacterial activity of Bi1−xMgxFeO3 NPs was found to be enhanced with increase in Mg doping concentration as it causes a reduction in the grain size of the samples.