Nano-crystalline (Ba0.5Sr0.5)Co0.8Fe0.2O3−δ powder has been successfully synthesized by a novel sol–gel thermolysis method using a unique combination of PVA and urea. The decomposition and crystallization behaviour of the gel precursor was studied by TG/DTA analysis. The gel precursor was calcined at different temperatures and the phase evoluation was studied by X-ray diffraction (XRD) analysis. From the result of X-ray diffraction patterns, it is found that a cubic perovskite (Ba0.5Sr0.5)Co0.8Fe0.2O3−δ was formed by calcining the precursor at 450°C for 5h, but the well-crystalline cubic perovskite (Ba0.5Sr0.5)Co0.8Fe0.2O3−δ was obtained by calcining the precursor at 650°C for 5h. Morphological analysis of the powder calcined at various temperatures was done by scanning electron microscope (SEM). Thermogravimetric (TG) results showed the lattice oxygen loss of the product was about ∼2% in its original weight in the temperature range 40–900°C. Finally, thermal expansion and electrical conductivity of the synthesized material were measured by dilatometer and four-probe dc method, respectively.