Multiferroic (BFO) nanoparticles doped with strontium with general formula, Bi1‐xSrxFeO3 (x=0.0,0.3,0.5, 0.7 ) have been synthesized by modified Sol‐gel auto‐combustion process. The structural, electrical, optical, and magnetic properties of the samples are discussed. The structural analysis carried out by X‐ray powder diffraction technique shows a structural transition from rhombohedral (R‐3c) to cubic(Pm‐3m) for the doping amount of strontium(Sr) equal to x=0.3. Morphological analyses of the prepared samples are carried out using scanning electron microscopy (SEM). Frequency‐dependent dielectric constant and ac conductivity have been studied. The doped samples, having improved dielectric properties, can be used to fabricate different optoelectronic devices. Strong dielectric dispersion and broad relaxation were exhibited by all samples. Cole‐Cole plots were employed as an effective tool to study the dispersion parameters namely optical dielectric constant, static dielectric constant, relaxation time, and spreading factor. The activation energy was calculated from relaxation peaks and Cole‐Cole plots and found to be compatible with each other. The bandgap of the samples was calculated using Diffuse reflectance spectral (DRS) analysis. The sharp and strong photoluminescence in the IR region is observed in the samples similar to ZnO, which is reported for the first time. The room temperature and low‐temperature magnetization studies point towards the superparamagnetic nature of the samples with an improvement of magnetic properties with doping. Antiferromagnetic behavior of bulk bismuth ferrite transforms to superparamagnetic nature for both pure and Sr‐substituted bismuth ferrite nanoparticles due to close dimension of crystallite size with magnetic domains leading to break‐down of the frustrated spin cycloidal moment.