The manifestation of substitution and dimension induced modifications in the magnetic origin and photocatalytic properties of Dy substituted bismuth ferrite (BDFO_x) particulate and fiber nanostructures are reported herein. A gradual transformation from rhombohedral to orthorhombic structure is observed in BFO with the increasing concentration of Dy. Substitution induced size reduction in particulate and fiber nanostructures is evident from the scanning and transmission electron micrographs. Energy band structures of both particulate and fiber nanostructures are considerably influenced by the Dy substitution, which is ascribed to the formation of new energy states underneath the conduction band of host BFO. Field dependent and temperature dependent magnetic studies reveal that the origin of magnetism in pure BFO systems is due to the antiferromagnetic-core/ferromagnetic-shell like structure. On the other hand, it gets completely switched into ‘canted’ spin structures due to the substitution induced suppression of cycloidal spins in BFO, which is found to be the origin of magnetism in BDFO_x particulate and fiber nanostructures. The visible light driven photocatalytic activity of BDFO_x nanostructures is found to be enhanced with increasing concentration of Dy. Substitution induced band gap modification, semiconductor band bending phenomenon mediated charge transfer and reduced recombination resistances are attributed to the observed photocatalytic enhancements in these nanostructures.