We have studied the leakage current in sol-gel PZT capacitors with reactive sputtered RuOx electrodes under different oxygen pal tial pressures during sputtering. The amount of oxygen content in the electrodes has been found to have a significant effect on the leakage current. Considerable decrease of leakage current at lower electric field can he achieved by sputtering at a higher oxygen partial pressure of 20%. Correlation with degradation experimental results suggests that the presence of an oxygen deficient layer near the electrode has crucial effect in controlling both the leakage current and degradation.