Chemical processing of $Nb_2O_5$coated $BaTiO_3$-composite particles was investigated with surface modification through hydrolysis of niobium ethoxide on the surface of $BaTiO_3$ particles. It was clarified from BET measurement, SEM&TEM observations and Zeta-potential that origineal $BaTiO_3$ particles were homogeneously coated or modified with niobium hydroxide particles. $Nb_2O_5(1wt%)$-coated $BaTiO_3$ bodies sintered at 1250-$1257^{circ}C$ exhibited a rather flat temperature characteristic with dielectric constants of 2200-3000 and $tan{delta}; of;{leqq}1%$. The microstructure on $Nb_2O_5$-coated $BaTiO_3$ sintered bodies consisted of grains of several ${mu}m which are much smaller than those of $BatiO_3$ sintered bodies, suggesting that the grain growth of $BaTiO_3$ was suppressed by Nb205 particles existing existing at the grain boundaries.