The influence of the microstructure evolution on electrical properties as a parameter of the firing temperature was studied for materials in the BaTiO3(BT)–MgO–Ln2O3 (Ln=Ho and Dy) system. The sintering behavior and the formation of the core-shell structure were dependent on the kind of doped rare earth elements. The stability of the core-shell structure and electrical properties of Dy doped specimens against the firing temperature were much lower than those of the Ho doped specimens. Especially, the Dy doped disk specimens fired at more than 1320°C, in which the core-shell grains were destroyed as judged by the differential scanning calorimetry (DSC) measurement and the transmission electron microscopy (TEM) observation, exhibited characteristic electrical properties. The electrical properties of the Ho doped multilayer capacitor (MLC) specimen were superior to those of the Dy doped one. It was found that the microstructure had a definite influence on the electrical properties, such as the temperature dependence of the dielectric constant and the capacitance aging behavior under an unloaded field.