Ba0.97Ca0.03Ti0.94Sn0.06O3 ceramics with Fe2O3 doping (BCTS-xFe; x = 0, 0.001, 0.002, 0.003, 0.004 and 0.005) were synthesized via the solid-state combustion technique. The influence of small amounts of Fe2O3 doping on the phase evolution, microstructure, electrical and magnetic properties of BCTS ceramics was investigated. We found that increasing Fe2O3 doped content changed the crystal structure from coexisting tetragonal and orthorhombic phases to a pseudo-cubic phase. The grain size, εc and Pr decreased rapidly with increasing Fe2O3 content. Moreover, TO-T and TC moved to lower temperatures and the maximum dielectric constant became significantly reduced with increased Fe2O3 doping. The BCTS ceramics with doped Fe2O3 displayed paramagnetic characteristics.