Fine Dy and Mg-doped barium titanate powders were prepared by hydrothermal method at 240∘C with BaCl2⋅ 2H2O, TiCl4 and NaOH as the main reactants, Dy2O3 and MgCl2⋅ 6H2O as additives respectively. The substitution style, microstructure and electrical properties of the two kinds of samples were comparatively studied by X-ray diffractometer (XRD), atomic emission spectrum (AES) and scanning electron microscopy (SEM) characterizations. It is confirmed that Dy or Mg enters into the BaTiO3 lattice. Ba site is replaced if a little Dy2O3 is doped but some more Dy will take up the positions of Ti. Mg always substitutes for Ti site. Dy and Mg are both useful to obtain the microstructure with small grains and high density, and the former results in a better microstructure. Dy has no influence on shifting and depressing Curie peak. When Dy2O3 content is 0.6 wt%, the dielectric constant rises up to 4250. However, Mg has evident effect on shifting Curie peak. The value of Δ Tc is −40∘C in the doping range of 0 to 0.15 wt%. When Mg/Ti atomic ratio is 0.06 in the precursors, the dielectric constant rises up to 4100.