The effects of $Dy_2O_3$ and $Er_2O_3$ co-doping on electrical properties and temperature stability of barium titanate ($BaTiO_3$) ceramics were investigated in terms of microstructure and structural analysis. The dielectric constant and the insulation resistance (IR) of 0.7 mol% $Dy_2O_3$ and 0.3 mol% $Er_2O_3$ co-doped dielectrics had about 60% and 20% higher than the values of undoped one, respectively, and the temperature coefficient of capacitance (TCC) met the X7R specification. The addition of $Dy_2O_3$ contributed to electrical properties caused by increase of tetragonality; however, preferential diffusion of $Dy^{3+}$ ions toward A site in $BaTiO_3$ grain exhibited an adverse effect on temperature stability by grain growth. On the other hand, The $Er_2O_3$ addition in $BaTiO_3$ could affect the TCC behavior and the IR with suppression of grain growth caused by reinforcement of grain boundary and electrical compensation. Therefore, the enhanced electrical properties and temperature stability through the co-doping could be deduced from the increase of tetragonality and the suppression of grain growth.