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Doping of suitable metal ions in ferroelectric oxides modifies the physical properties and can induce additional functionalities. Here, we present a detailed study on the effects of Sm concentration on the structural, dielectric, ferroelectric, and piezoelectric properties of ((K0.5Na0.5)1−3xSmx)NbO3 (KNSN) (0.00 ≤ x ≤ 0.02) ceramics. X‐ray diffraction and Raman spectroscopic analysis indicate that KNSN ceramics exhibit the single‐phase orthorhombic (Amm2) structure for x = 0.00 and the coexistence of orthorhombic and tetragonal (Amm2 + P4mm) structure for the composition range 0.005 ≤ x ≤ 0.02. The tetragonal phase fraction increases with an increase in Sm concentration. We observed dielectric relaxation behavior in KNSN at orthorhombic to tetragonal (TO–T) phase transition temperature, and its origin can be attributed to the structural heterogeneity at the inter‐ferroelectric phase boundary. Increasing Sm concentration leads to the broadening of the ferroelectric phase transition peaks. Further, the structural heterogeneity of the ceramics was seen from the slope of the dielectric constant versus log frequency and central peak behavior of Raman spectra at room temperature (RT). The study reveals that x = 0.005 shows maximum dielectric constant (Ɛr = 583), remanent polarization (2Pr = 57.02 μC/cm2), and piezoelectric coefficient (d33 = 94 pC/N) at RT and is associated with increased local structural heterogeneity due to Sm doping. [ABSTRACT FROM AUTHOR]