X-ray diffraction analysis of BiFeO3 (BFO) and rare earth (R) substituted BiFeO3 (BRFO) ceramics revealed the pervoskite phase formation. Raman scattering measurements elucidated the weakening of Bi–O covalent bond and destabilization in FeO6 octahedral chains in BRFO ceramics. A variation in Fe–O bond length and modulation in FeO6 local environment were evidenced from UV–visible spectroscopic studies. A weak ferromagnetism along with high coercivity (HC) values was observed for BRFO ceramics. Heat flow measurements revealed a reduction in Néel transition temperature (TN) and a slight increase in Curie transition temperature (TC). The suppression of long range ferroelectric ordering in BRFO ceramics were probed from the nature of endotherm corresponding to TC. The variation and nature of phase transitions in BRFO ceramics were explained based on a structural model by considering the local strain fields created by ordered oxygen displacements due to A-site cation disorder and size variance effects. © 2015, Springer Science+Business Media New York.