This study highlights the importance of electronic hybridizations in the FeO6 octahedral distortion, structural evolution, magnetization, oxidation state and atomic bonding covalency in multiferroic (Bi1−xNdx)FeO3 (x = 0–0.10) ceramics as the system approaches the morphotropic phase boundary (MPB). The Rietveld-refinement analysis reveals reductions of bismuth deficiency, oxygen vacancies, and nonpolar Bi2Fe4O9 phase as Nd increases. The piezoresponse domain switching reveals a coexistence of polar ferroelectric rhombohedral and minor orthorhombic (nonpolar) phases. The piezoresponse ferroelectric polarization hysteresis loops are attributed to the reduced leaky conductivity in the Nd-doped compositions. The Fe K- and L2,3-edges synchrotron X-ray absorptions suggest a mixture of Fe3+ and Fe4+ valence states and reduction of the FeO6 octahedral distortion by the A-site Nd substitution. The oxygen K-edge synchrotron X-ray absorptions reveal that the hybridizations of the O 2p–Fe 3d and the O 2p–Bi 6sp orbitals were decreased with increasing Nd content. Display omitted •Reduction of Bi and O vacancies by the A-site rare earth Nd substitution in BiFeO3.•Coexistence of polar ferroelectric rhombohedral and nonpolar orthorhombic phases.•Mixture of Fe3+ and Fe4+ valences and reduction of the FeO6 octahedral distortion.•Important roles of the O 2p–Fe 3d and the O 2p–Bi 6sp orbital hybridizations.