It is shown that CaCu3Ti4O12 grains in a polycrystalline specimen have domains and comparatively thick domain walls. The orientations of the domains within a grain were observed to be slightly tilted toward each other, suggesting the presence of lattice distortions. Multiple reflection spots in the electron diffraction pattern and misfit dislocations were also found in the domain walls. Kelvin probe force microscopy showed the variation in the surface potential of a grain by external electric fields, demonstrating the polarization of dipole moments. The influence of the local distortions on the formation of dipole moments is discussed in terms of the deviation from the cubic symmetry due to the small misfit between domains in a single grain of CaCu3Ti4O12 polycrystals. (c) 2005 American Institute of Physics.