Multiferroic BiFeO3 (BFO), Bi0.95Dy0.05FeO3 and Bi0.95Dy0.05Fe0.95Cr0.05O3 samples were successfully synthesized by a carbon microsphere-assisted sol-gel (CSG) method. X-ray diffraction analysis confirmed a lattice distortion from a rhombohedral structure to a tetragonal structure upon doping Dy and Cr in BFO. The morphology of BFO and doped BFO could be effectively controlled to form nanoparticles, due to the nucleation sites of the carbon microspheres. The co-doping of Dy and Cr in BFO had a significant improvement effect on the magnetic properties, with the remnant magnetization being 0.557 emu g(-1), due to the structural phase transition, size effects and the strong ferromagnetic interaction between Fe(3+)-O-Cr(3+) ions arising from Cr substitution. Meanwhile, the doping of Dy into BFO effectively reduced the leakage current and enhanced the ferroelectric properties. The simultaneous enhancement of magnetic and ferroelectric properties shows the great potential application of Dy- and Cr-co-doped BFO in future multifunctional devices.