Ultrafine ceramic powders with high tetragonality are the fundamental for the multi-layer ceramic capacitors (MLCCs). In this study, an efficient method of atmospherically hydrothermal assisted solid-state synthesis for ultrafine BaTiO3 particles is presented. The BaTiO3 nanopowders with homogeneous distribution, a mean particle size ~ 260 nm and high tetragonality of 1.0095 were obtained by at the optimal parameters of hydrothermal time of 6 h, Ba(OH)2·8H2O/BaCO3 = 0.25/0.75 and calcination temperature of 1000 oC. XRD and HRTEM analyses revealed a “core-shell” structure of TiO2@BaTiO3 formed in the first-step hydrothermal process, which reduces the diffusion distance between BaCO3 and TiO2, resulting in a lower calcination temperature at the second-step solid-state reaction. Compared with pure hydrothermal and solid-state reaction processes, the atmospherically hydrothermal assisted solid-state synthesis in this study shows larger ability for improving the particle size distribution and the tetragonality, reducing defects of BaTiO3 particles. In particular, the grain size, sintering density, and dielectric constant at the Curie temperature of BaTiO3 ceramics are 1.93 μm, 98%, and 7066, respectively. In the solid-state reaction stage, the lattice diffusion distance from BaO to TiO2 tends to decrease due to the formation of BaTiO3 shells, thus, high tetragonal and relatively small particle size of BaTiO3 powder was synthesized. This work presents a method for preparing ultrafine BaTiO3 powders with large tetragonality for MLCCs.