Crystal structure, piezoelectric, and dielectric properties were investigated in the new lead-free BKT-based piezoelectric ceramics of (1-x)(Bi1/2K1/2)TiO3-xBi(Mg2/3Nb1/3)O-3. The morphotropic phase boundary (MPB) of the system between tetragonal and rhombohedral phases lies near the composition of x=0.02. The optimal piezoelectric property of small-signal d(33) is much enhanced to be 96 pC/N (x=0.01), which is higher than any other BKT-based compositions. By the introduction of Bi(Mg2/3Nb1/3)O-3, the ceramics exhibit a lower coercive field E-C. In addition, a relaxor-like behavior with a frequency-dependent Curie temperature T-m is observed, and high Curie temperature T-m around 380 degrees C is obtained in the investigated system. This study suggests that the piezoelectric properties of BKT can be significantly improved by the means of Bi(Mg2/3Nb1/3)O-3 substitution.