Dielectric properties, lattice‐ and microstructure of ceramic BaTiO3showing grain sizes of 0.3–100 &mgr;m were studied. At grain sizes <10 &mgr;m the width of ferroelectric 90° domains decreases proportionally to the square root of the grain diameter. The decreasing width of the domains can be theoretically explained by the equilibrium of elastic field energy and domain wall energy. The smaller the grains, the more the dielectric and the elastic constants are determined by the contribution of 90° domain walls. The permittivity below the Curie point shows a pronounced maximum &egr;r≊5000 at grain sizes 0.8–1 &mgr;m. At grain sizes <0.7 &mgr;m the permittivity strongly decreases and the lattice gradually changes from tetragonal to pseudocubic.