The tetragonal reentrant phase conversion (P4mm) is obtained from the phase coexistence of the tetragonal and the non-polar hexagonal phases (P63/mmc) as a structural effect due to Gd substitution in Ba1-yGdyTi1-xFexO3(x=0.05; y=0.005, 0.01 and 0.015) ceramics. The diffraction spots in the SAED patterns and the d-spacing of the HREM lattice fringes mainly evidence the coexistence of the structural phase. Rietveld refinement offers the bond length and the other structural data. Ti presents itself as Ti3+ and Ti4+ whereas Fe presents as Fe2+ and Fe3+, revealed by the XPS spectra. The octahedra partly change to pentahedral due to the creation of the charge compensating the oxygen vacancies and therefore the conversion from tetragonal to hexagonal phase occurs. The EPR feature corresponding to Ti3+ decreases progressively as the Gd content increases, which implies a decrease of the oxygen vacancy concentration. This facilitates reentrant tetragonal phase conversion. The observed ferromagnetic nature originated from the Fe3+-O2--Fe3+ super-exchange and Gd3+-O2--Gd3+ interactions. The artificial single tetragonal phase magnetoelectric Ba0.985Gd0.015Ti0.95Fe0.05O3 material has the excellent magnetoelectric coupling coefficient of 3.74mV/cm.Oe.