KTa& Nb 03 (KTN) in an intermediate-concentration range (x= 15.7%) has been studied using dielectric-constant and spontaneous-polarization measurements. A large peak in the dielectric constant (e,"=70000)is observed at the temperature T, *. From room temperature down to T, *+20 K, e obeys a Curie-gneiss law with To-142.3 K. Below, e deviates from this law and P-E hysteresis loops are observed. These results indicate that the phase transition exhibits a diffuse character which is related to the appearance of microscopic polarized regions or cells. The e peak at T, * exhibits a cusp shape and becomes Battened upon application of low dc-bias fields. A corresponding dielectric loss peak is also observed, the position of which reveals the relaxational character of the transition. Through measurements of e(E, T) for different dc-bias fields, we have characterized the dielectric nonlinearities in the transition range; the first nonlinear coefficient, e(', diverges in two distinct ranges, as (T-T,) ", with n-9 initially and with n = 2 closer to T, *. These results suggest that diffuse phase transitions in mixed ferroelectrics are due to the ordering of polar cells modified by mutual strain interactions.