Materials with ferroelectric properties, low bandgap energies, high polarization, low loss, and thermal stability are essential for future solar-cell applications. Researchers have attempted to obtain such materials by using several approaches. In this vein, a novel approach is reported in this work using gamma ray irradiation. The effect of gamma radiation on the structural, optical, and ferroelectric characterizations of bismuth (Bi)-doped barium titanate (BaTiO3 (BT)), namely Ba0.95Bi0.05TiO3 ceramics (abbreviated as (Bi:BT)), was investigated. X-ray diffraction, structure refinement, and Raman study revealed the presence of a perovskite structure with a tetragonal phase in all investigated samples. Morphological study revealed a nonuniform grain size and some porosity. Gamma irradiation-induced combined effects were proved by a detailed analysis of bond lengths, bond angles, octahedral distortions, oxygen vacancies, and charge compensations. Electron paramagnetic resonance (EPR) study gave direct evidence of oxygen vacancies in the irradiated samples. After gamma irradiation, UV–vis study indicated a decrease in the bandgap from 3.14 to 2.80 eV and a significant increase in visible light absorption. Cole–Cole plots confirm as an increase in gamma-ray dose results in higher levels of electron hopping. Study of the P–E hysteresis loop demonstrated that ferroelectric properties could be maintained after gamma irradiation, with a slight decrease in remnant polarization. The behaviour of the P–E was correlated with increasing gamma dose in the investigated ceramics, demonstrating a strong gamma dependence in the loops’ profile. We guess that the present approach may be a promising technique for enhancing the multifunctionality of electronic devices.