Effects of MgO coating on electric properties of BaTiO3 have been studied in terms of microstructural development and substitution of Mg ion. MgO coated BaTiO3 particles were prepared by a homogeneous precipitation method and other powders by a conventional mixing method for a parallel study. MgO coated BaTiO3 exhibited homogeneous microstructure compared with mixed samples. XRD analysis revealed that Mg substitution for the Ti site in the MgO mixed sample was much greater than in the coated one. MgO coated BaTiO3 showed higher dielectric constants at the Curie temperature whereas mixed ones had higher dielectric constants at 60~80. Electrical properties of MgO mixed and coated BaTiO3 were affected by the diffusion behavior of Mg in BaTiO3 lattice, which was confirmed by leakage currents.