The crystal structure, photocatalytic activity, and ferromagnetic properties of Sm-substituted (Bi1−xSmxFeO3, x = 0.05, 0.10, 0.15, 0.20) nanoparticles were systematically investigated within the entire Sm substitution region. The morphotropic phase boundary (MPB) consisting of a rhombohedral phase, orthorhombic interim phase (Pna21), and orthorhombic phase with 0.1 ≤ x ≤ 0.2 is constructed and confirmed by x-ray diffraction and Raman spectra with new vibration modes at ∼310 cm−1. The photocatalytic activity and ferromagnetism are improved around the MPB region (x = 0.10). Meanwhile, the wasp-waisted hysteresis loops are present around the MPB region. Wasp-waisted hysteresis loops have the features of low hysteresis loss in low magnetic fields and are helpful in designing some multiferroic devices.