The microstructures and dielectric properties of multilaver ceramic capacitors based on reoxidized Ba(Ti-0.88,Zr-0.12)O-3 (BTZ) materials with Ni electrodes were studied using transmission electron microscopy. Dielectric measurements showed that the BTZ materials exhibited frequency relaxation effects. Although X-ray diffraction showed a single pseudocubic phase, split and elongated electron diffraction spots were observed using selected area diffraction (SAD). There were no super-lattice diffraction spots in the SAD pattern. The microstructures of BTZ dielectric materials were observed at dynamical diffraction conditions, and multidomain structures coexisting in one grain were imaged with high contrast. Bright field and centered dark field images revealed the pseudocubic (100) and (110) domain walls had developed in some regions of the same grain with normal ferroelectric macro-domain features, and bend contours and distorted domain walls were seen. Defects with the features of low angle grain boundaries, dislocations, and phase boundaries were also observed. Uneven distribution of internal stress and coexistence of multiphases and multidomains in individual grains were considered to be responsible for the frequency relaxor behavior observed in these materials. A model of the evolution of the microstructures with the decrease of temperature is presented.