Zr substituted 0.8BaTiO30.2 Bi0.5K0.5TiO3 lead free ceramic materials with a composition 0.8Ba0.2(Bi0.5K0.5)Ti1-xZrxO3 (0.01 ≤ x ≤ 0.06) were prepared by conventional solid state reaction method followed by high energy ball milling. The X-ray diffraction studies confirmed the tetragonal structure of the material at room temperature. Density was decreasing with the substitution of Zr. Microstructure studies were done by using scanning electron microscope. Temperature and frequency dependent dielectric studies were carried out and showed that the dielectric constant, dielectric loss and Curie temperature were decreasing with the substitution of Zr. Relaxor behavior was observed in all the Zr substituted samples. Degree of diffuseness was calculated from the modified Curie-Weiss law and it was found to increase with the substitution of Zr. Frequency and temperature dependent AC conductivity was calculated and it was found to obey Jonscher’s power law. Substitution of Zr decreased the conductivity of the material. Activation energy was calculated and it was decreasing with an increase in Zr substitution.