Glasses were prepared by the melt-quench technique in the K2O-SiO2-Bi2O3-TiO2 (KSBT) system and crystallized bismuth titanate, BiT (Bi4Ti3O12) phase in it by controlled heat-treatment at various temperature and duration. Different physical, thermal, optical, and third-order susceptibility (chi(3)) of the glasses were evaluated and correlated with their composition. Systematic increase in refractive index (n) and chi(3) with increase in BiT content is attributed to the combined effects of high polarization and ionic refraction of bismuth and titanium ions. Microstructural evaluation by FESEM shows the formation of polycrystalline spherical particles of 70-90 nm along with nano-rods of average diameter of 85-90 nm after prolonged heat treatment. A minor increase in dielectric constants (epsilon(r)) has been observed with increase in polarizable components of BiT in the glasses, whereas a sharp increase in epsilon(r) in glass-ceramics is found to be caused by the formation of non-centrosymmetric and ferroelectric BiT nanocrystals in the glass matrix.