Commercial hydrothermally synthesized BaTiO3 powder with a cubic structure was annealed in a temperature range of 650–900 ℃, and the cubic-tetragonal structure transition and microstructure evolution of the powder were investigated in relation to the annealing process. The BaTiO3 powder used had a cubic structure below an annealing temperature of 800 ℃ and a tetragonal structure above 850 ℃. Particle growth occurred under a low activation energy of ~33.2 kJ/mol because of the nanocrystalline size effect, while the crystallite size slightly decreased in the powder with the cubic structure and sharply increased in that with the tetragonal structure. This was because the OH group in the powder with the cubic structure influenced the lattice extension on the particle surface. This stabilized the cubic structure and reduced the crystal ordering, which retarded the crystallite size. When the annealing temperature was increased, the crystallite growth reduced the intrinsic strain and enhanced the tetragonality in the powder with the tetragonal structure as a result of the removal of the OH group.