Multiferroic (x)BaTiO3/(1 − x)Li0.5Fe2.5O4 (0.0 ≤ x ≤ 1) perovskite/spinel nanocomposite was synthesized using a modified citrate auto-combustion method. Both BaTiO3 (BTO) and Li0.5Fe2.5O4 (LFO) phases along with their composites were successfully characterized using X-ray diffraction, Fourier transformation infrared spectroscopy, and X-ray absorption fine structure spectroscopy. The nanoscale, morphology, and magnetic properties were imaged and acquired using high resolution transmission electron microscopy, atomic force microscopy, and vibrating sample magnetometer. Synchrotron radiation-based elemental selective XAFS technique was performed around Fe K-edge to obtain the selective and the detailed local structural information of Li0.5Fe2.5O4 nanoparticles (NPs). The main remarkable result in this work is the enhancement in the coercivity (HC) of LFO NPs after compositing with BTO particularly at x = 0.6, and at x = 0.8. Based on the collected results, BTO/LFO nanocomposite can be seen as a good candidate for different technological applications including magnetically modulated piezoelectric, safety rechargeable batteries, and multilayer ceramic capacitor.