Tb and Co substituted bismuth ferrite nanoparticles (NPs) with chemical composition Bi1-xTbxFe1-yCoyO3 (x = 0, 0.05; y = 0, 0.05) have been synthesized by a sol-gel method and characterized by x-ray diffraction (XRD), Mossbauer spectroscopy, dc magnetization and electric polarization measurements. The aim of the present work is to improve ferroelectric properties of BiFeO3 by substitution of Tb3+ ions in Bi3+ site and magnetic properties by substitution of Co2+ in Fe3+ site. The XRD patterns of all prepared samples show formation of the desired phase along with a small amount of impurity. Room temperature Mossbauer spectroscopic studies reveal that all samples are in magnetically ordered state. Magnetic hysteresis loops of all samples indicate a significant enhancement of magnetic moment and coercivity whereas electric polarization measurements at room temperature reveal an improvement of ferroelectric properties in the co-substituted sample. © 2016 Author(s).