The crystal structure, magnetic and local ferroelectric properties of polycrystalline Bi1-xGdxFeO3 (x = 0.1, 0.2, 0.3) samples were investigated at room temperature. Gadolinium substitution was found to induce a polar-to-polar R3c -> Pn2(1)a structural phase transition at x approximate to 0.1. Increasing the content of the substituting element suppressed the spontaneous polarization in Bi1-xGdxFeO3, resulting in a ferroelectric-paraelectric Pn2(1)a -> Pnma phase transition at 0.2 < x < 0.3. The substitution caused the appearance of a weak ferromagnetic moment. The data presented are consistent with the hypothesis that the most effective way to induce spontaneous magnetization in antiferromagnetic BiFeO3 seems to be related to A-site substitution by rare-earth ions with a large difference in ionic radius with respect to Bi3+. The effect of the magnetically active Gd3+ substitution on the low-temperature magnetic properties of Bi1-xGdxFeO3 samples is also discussed.