A novel class of heterojunctioned bismuth oxyhalide photocatalysts yBiO(Cl_xBr_1−x)–(1 − y)BHO (bismuth oxide hydrate) has been prepared by a simple hydrothermal method. The new materials are highly efficient under visible light irradiation (λ ≥ 420 nm) for the degradation of Rhodamine B (RhB), Acetophenone (AP) and photooxidation of iodide. Even though BHO shows very low photocatalytic efficiency, its combination with BiO(Cl_0.5Br_0.5) provides exceptional high photocatalytic activity due to more effective photo-excited electron–hole separation by the heterojunction semiconductor. The relationship between BHO amounts and the photocatalytic activities was investigated. Compared to Degussa P25 the composite with x = 0.5 and y = 0.9 demonstrated 14.6 times higher activity in removing aqueous RhB under visible light irradiation. The possible photodegradation mechanism was studied by the examination of different active species through adding appropriate scavengers. Furthermore, the photogenerated charge transfer process was proposed based on the bands positions of BiO(Cl_0.5Br_0.5) and BHO. After five cycles, the catalyst did not exhibit any significant loss of photocatalytic activity, confirming the photocatalyst is essentially stable. The excellent activity and photostability reveal that yBiO(Cl_xBr_1−x)–(1 − y)BHO is a promising visible-light-responsive photocatalyst.