We show progressive enhancement in ferroelectric polarization with increasing Sm doping concentration along with retrieving tetragonality from the hexagonal paraelectric phase for Ba 1− x Sm x Fe 0.2 Ti 0.8 O 3 (BTO) solid solution ( x = 0, 0.10, 0.15, 0.20). The cooperative off-centering phenomenon due to octahedral distortion promotes interpolar clustering resulting in the formation of polar nano region causing an enhancement in saturation polarization and coercive field with Sm doping. Ferroelectric domain fringes observed in scanning and transmission electron microscopic images indicate the presence of ferroelectric ordering for the highest Sm-doped compound. Formation of Sm Ba ∘ − Fe Ti ′ defect complex results in a reduction of oxygen vacancy (V O ) defects which is observed from x-ray photoelectron spectroscopy. The reduction in V O improves the domain switching by domain wall depinning and facilitates the increment in saturation polarization with Sm doping. The x-ray absorption spectra at Ti L 3,2 edges show the increase of t 2 g e g ratio indicating enhanced Ti 3 d– O 2 p orbital hybridization which is supported by DFT calculation. This DFT calculation also confers that the increment in Ti 3 d /Sm 4 d– O 2 p orbital hybridization further weakens the short-range repulsion between core orbitals and facilitates the enhancement of saturation polarization.