We present the crystal structures, dielectric and optical performance of Samarium doped NBT ceramic, (Bi(1−x)Smx)0.5Na0.5TiO3for x = 0.0, 0.01, 0.02, 0.03, 0.04, 0.05 fabricated by a solid-state reaction method. The Rietveld refinement outcomes of XRD data show that all the samples have rhombohedral crystal structures with the R3c space group. The variation of unit cell volume with composition displays an anomaly at x = 0.03. The Raman modes centered at 258 cm−1 and 535 cm−1 become broader with trivial smearing towards higher wavelength through a rise in Sm percentage. The temperature corresponding to maximum permittivity attains maximum value at x = 0.03. We found that dielectric loss decreases with increasing Sm content. The diffusing nature of the phase transition is enhanced with the rise in dopant concentration of Sm. The bandgap energy obtained from the reflectance data of UV–visible spectroscopy increases x = 0.03 and afterward simultaneously diminishes with Sm concentration. The photoluminescence study was carried out using the excitation spectra and emission spectra. The most intense emission has been observed at x = 0.03. Besides, a feeble green emission peak at 564 nm and two burly red emission peaks at 600 nm and 646 nm correspond to the 4G5/2→6H5/2 transition, and 4G5/2→6H7/2 and 4G5/2→6H9/2 transitions respectively. We expect that the incorporation of Sm in the NBT system will be a suitable method to highlight the multifunctional characteristics of the material for potential applications in devices having manifold functions incorporated with electrical and luminescence properties.