Nanocomposites (NCs) of BiFeO3 and CoFe2O4 have been prepared by sol-gel route. Saturation magnetization increases with the increase in CoFe2O4 content in the NCs. Frequency dependent εr curves show dispersive behavior and relaxation in the NCs. εr–T curves of the NCs exhibit an anomaly around the Néel temperature of BiFeO3. Enhanced magnetocapacitance in NCs exhibits an improvement of magnetoelectric effect.