Multifunctional materials based on rare earth ion doped ferro/piezoelectrics have attracted considerable attention in recent years. In this work, new lead-free multifunctional ceramics of Ca_1−x(LiHo)_x/2Bi₄Ti₄O₁₅ were prepared by a conventional solid-state reaction method. The great multi-improvement in ferroelectricity/piezoelectricity, down/up-conversion luminescence and temperature stability of the multifunctional properties is induced by the partial substitution of (Li_0.5Ho_0.5)²⁺ for Ca²⁺ ions in CaBi₄Ti₄O₁₅. All the ceramics possess a bismuth-layer structure, and the crystal structure of the ceramics is changed from a four layered bismuth-layer structure to a three-layered structure with the level of (Li_0.5Ho_0.5)²⁺ increasing. The ceramic with x = 0.1 exhibits simultaneously, high resistivity (R = 4.51 × 10¹¹ Ω cm), good piezoelectricity (d₃₃ = 10.2 pC N⁻¹), high Curie temperature (T_C = 814 °C), strong ferroelectricity (P_r = 9.03 μC cm⁻²) and enhanced luminescence. These behaviours are greatly associated with the contribution of (Li_0.5Ho_0.5)²⁺ in the ceramics. Under the excitation of 451 nm light, the ceramic with x = 0.1 exhibits a strong green emission peak centered at 545 nm, corresponding to the transition of the ⁵S₂ → ⁵I₈ level in Ho³⁺ ions, while a strong red up-conversion emission band located at 660 nm is observed under the near-infrared excitation of 980 nm at room temperature, arising from the transition of ⁵F₅ → ⁵I₈ levels in Ho³⁺ ions. Surprisingly, the excellent temperature stability of ferroelectricity/piezoelectricity/luminescence and superior water-resistance behaviors of piezoelectricity/luminescence are also obtained in the ceramic with x = 0.1. Our study suggests that the present ceramics may have potential applications in advanced multifunctional devices at high temperature.