Abstract2D van der Waals materials and their heterostructures are a fantastic playground to explore emergent phenomena arising from electronic quantum hybridization effects. In the last decade, the spin‐dependant hybridization effect pushed this frontier further introducing the magnetic proximity effect as a promising tool for spintronic applications. Here the uncharted proximity‐controlled magnetoelectric effect in EuO/graphene heterostructure is unveiled. This is obtained while creating a new multiferroic hybrid heterostructure with multifunctional properties. Using a topotactic method magnetic insulating EuO thin films on graphene is grown under high compressive strain, which induces the appearance of an additional ferroelectric order, with an electric polarization that reaches up to 18 µC cm−2 at room temperature. This observation therefore quantitatively confirms the theoretical predictions made 15 years ago of a strain‐induced ferroelectric state in EuO. Moreover, the EuO induces a magnetic proximity state into the graphene layer by interfacial hybridization. This new ferroelectric state in the EuO/graphene heterostructure is stable up to room temperature where it coexists with the EuO/graphene magnetic state. Furthermore, intertwined magneto‐electric effects are shown in these strained heterostructures which can facilitate the manipulation of magnetization and electric polarization in future memory and neuromorphic devices.