We have fabricated rare-earth ion substituted bismuth titanate (BIT) ceramics, Bi3.25Ln0.75Ti3O12 (BLnT; Ln=La, Nd, Sm, Dy), using the conventional solid-state reaction method and have investigated the changes in the structural distortion and electrical properties, which resulted from the substitution of the rare-earth ions in BIT ceramics. As the ionic radius of the rare-earth ion substituted into the BIT decreased, the structural distortion and decreases in the unit cell volume became more pronounced as well as the Curie temperature increased monotonically from 354 °C (BLaT) to 480 °C (BDyT). BNdT ceramics had relatively high remanent polarization value (12.5 μC/cm2) at an applied electric field of 130 kV/cm. The extent of the structural distortion influenced the dielectric and ferroelectric properties of the BLnT ceramics.