The study of the substitution of manganese by cobalt in the perovskite (LaBi)MnO3 in view of discovering magneto-dielectric properties in manganites, has allowed the perovskite La1.2Bi0.8Mn 1.2Co0.8O6.02 to be selected. This phase is indeed ferromagnetic, like the parent phase La1.2Bi 0.8Mn2O6.20, yet with a much higher T C (181 K instead of 103 K). Moreover, it is a better insulator than the other members with an activation energy of 86 meV. Importantly, it exhibits a significant magneto-dielectric effect of around 0.25% at 80 K. Finally, it is also shown to exhibit magnetoresistance (MR) properties at low temperature, with MR values up to -19% at 125 K. These properties are explained on the basis of Mn4+/Co2+ ferromagnetic interactions, electronic phase separation and spin-lattice interactions. © The Royal Society of Chemistry 2008.