Bi1-xPxFeO3 (BPxFO) nanoparticulates with tunable oxygen vacancy have been synthesized via sol-gel process. Substitution induced oxygen vacancy defects in BPxFO compositions were evidenced from their X-ray photoelectron spectra, where the mechanism behind the formation of oxygen vacancy was essentially found to be the dual oxidation states of Pr (+3/+4) ions. The origin of the observed enhanced magnetic properties in BPxFO nanoparticulates is attributed to be the oxygen vacancy mediated alterations in Fe-O-Fe bond angle and the alignment of Pr-3d magnetic moments with Fe-3d magnetic moments, which is resulted the ferromagnetic exchange interactions in the BPxFO system. The observed enhanced photocatalytic activity of BPxFO compositions is attributed to the formation of defective states in the valence band due to the oxygen vacancies that favored the dispersion of band edge position with required photocatalytic redox potential as well as the acceleration of the charge separation process in these defective BPxFO systems.