Polycrystalline (1-x)(0.75Bi4Ti3O12-0.25Bi0.5Na0.5TiO3)-xMgFe2O4 lead-free composites were prepared through sol-gel process with different stoichiometric proportions. The influence of proportions on microstructure, morphology, magnetic and dielectric behaviors has been explored detailedly. XRD patterns and Raman measurement reveal the multiphase coexistence with increasing content of MgFe2O4 of all the samples. The surface morphology presents different distributions of grain size for different proportions. The average grain size is confirmed to decrease as the MgFe2O4 concentration increases. Room-temperature magnetic properties are evidently enhanced by increasing addition of MgFe2O4. The giant effective permittivity at room temperature is obtained for all the samples with order of magnitude of 104–105. The variation of dielectric properties including effective permittivity and dielectric relaxation is strongly dependent on the content of MgFe2O4. Through rigorous analysis, the dielectric behavior should result from the common contributions of different conductivities and morphology variation due to the incorporation of MgFe2O4 to Bi4Ti3O12–Bi0.5Na0.5TiO3.