Nanocrystalline barium titanate, BaTiO3, powders have been successfully synthesized via water-based ambient condition sol (WACS) process, using barium hydroxide and titanium isopropoxide. The properties of the powder were investigated as a function of various processing parameters such as the concentration of Ba2+ ions ([Ba2+]), the concentration of base, and reaction time. The concentration of hydroxyl (OH−) groups in the BaTiO3 powder was greatly affected by changing the values of each processing parameter. The dielectric constant and tetragonality of the powders which contain lattice OH− more than 0.35 wt% were little affected with further increase in the lattice OH− concentration. The dielectric loss was highly varied with the concentration of the OH− groups, and it was increased with increasing OH− concentration. Calcination treatment significantly improved the dielectric properties of the powder. With higher calcination temperature, the dielectric constant increased and the dielectric loss decreased.