Rare-earth ion La is doped at the bismuth site in BiFeO3 to produce Bi0.8La0.2FeO3 polycrystalline ceramics via a sol-gel auto-combustion synthesis method. For comparison, the similar experiments are also carried out for the non-doped BiFeO3 at the same time. It is found that both non-doped and La doped BiFeO3 are composed of nanoscale crystallites (~50 nm). Furthermore, La doping suppresses the formation of the secondary phase and leads to a structural phase transition from a rhombohedral to an orthorhombic or a pseudotetragonal structure. More importantly, the magnetic and ferroelectric properties in La doped ceramics were both enhanced, as evidenced by the typical electric and magnetic hysteresis loops. These property evolutions can be attributed to the elimination of the secondary phase and the structural distortion caused by La doping.