Dense ceramics of (1-x)BaTiO3-xLaYO(3) (LBTY) (0 < x < 0.50) have been fabricated by the conventional solid-state route. Phase purity and crystal structure of LBTY ceramics were investigated using a combination of X-ray diffraction (XRD), electron diffraction (ED), and Raman spectroscopy. XRD analysis shows the tetragonal distortion of undoped (x=0) BaTiO3 (space group P4mm) decreases with increasing x, reaching an average cubic symmetry (space group ) at x=0.05. For x > 0.05, the lattice parameter a increases almost linearly up to x=0.40, above which a secondary phase isostructural with LaYO3 precipitates. ED patterns along [110](p) for 0.30 < x < 0.40 exhibit superlattice reflections at 1/2 (hkl) positions, indicating a doubling of the unit cell, which may arise from either octahedral tilting and/or chemical 1:1 B-site ordering within nanoclusters. Existence of nanodomains was revealed by dark-field transmission electron microscopy (TEM). Raman spectroscopy reveals nanoclustering to occur readily at low substitution levels and to increase progressively toward a nanoscale phase separation-like phenomenon, which precedes the precipitation of individual crystals of an LaYO3-based solid solution. Three distinctive subgrain microstructures are revealed by conventional TEM imaging. x=0 exhibits ferroelectric microdomains which completely transverse the grains, whereas for x=0.025 and 0.05, ferroelectric microdomains coexist with nanodomains. Other structural features such as core-shell-type substructures, {111} twins and dislocations are also observed in some grains. For x > 0.10, only nanodomains are observed.