Using various particle sizes of starting BaTiO3, we investigated the effect of stress on the dielectric-temperature characteristics of cerium-modified barium titanate. Transmission electron microscopy and energy dispersive spectroscopy confirmed three distinct areas: a grain core, a grain shell, and gradient regions. The grain size and volume fractions of the grain core were somewhat proportional to the particle size of starting BaTiO3. The dielectric-temperature characteristics will be explained in terms of three inhomogeneous regions and the internal stress. The dielectric-temperature characteristic of the large grains (> 3 mu m) proved to be a function of variation in the T-c values, whereas that of the small grains (< 3 mu m) was a function of both the T-c values and the internal stress. In particular, the internal stress was found to be proportional to the volume fraction of the cerium-doped region, to depress and shift the calculated dielectric constant versus temperature characteristics.