Lead-free binary K1/2Bi1/2TiO3-Bi(Mg1/2Ti1/2)O-3 (KBT-BMT) ferroelectric ceramics with a morphology of dense and evenly sized grains have been prepared by conventional solid oxide reaction route. X-ray diffraction analysis indicates that all the samples possess pure perovskite structure, and undergo a phase transformation from tetragonal to pseudocubic phase as BMT adds into KBT. Meanwhile, BMT addition brings in the enhancement of the relaxor behavior as revealed by temperature-dependent dielectric profiles and the P-E loops. The impedance analysis reveals that the relaxation process existing in the ceramics belongs to a localized species. Further, in the frequency-dependent M(f) spectra, a shoulder response emerges accompanied by a bulk response as suitable amount of BMT is added, and its frequency dependence obeys Vogel-Fulcher relation f = f(0) exp[ - E-b/k(B)(T - T-VF)]. The shoulder response is believed to be the evidence of the existence of the polar nanoregions, which dominate the relaxor behavior of KBT-BMT ceramics.