This paper deals with an in-depth analysis on the role of the microstructure phase of titanium dioxide (TiO2) precursor in sodium bismuth titanate (Na0.5Bi0.5TiO3, hereafter represented as NBT) ceramics prepared through the hydrothermal method. The comparison of the grain size, microstructure, crystal structure, and electrical properties of the NBT ceramics is carried out using anatase and rutile TiO2. NBT ceramics with anatase TiO2 (denoted by NBTA) displayed superior dielectric and ferro/piezoelectric properties along with the additional functionality in terms of photocatalysis. Systematic studies of functional properties such as piezoelectric, ferroelectric, and dielectric stressed the far-reaching influence of effects on grain size. The mechanisms and functional properties of grain quantitative effects are also discussed. Grain boundaries volume fraction increment has decreased the dielectric peak but increased the diffusiveness in the case of the NBT with rutile TiO2 precursor (denoted as NBTR). Similarly, elastic stiffness increment restricts the movement of the domain wall and led to a decrement in remnant polarization along with an increase in the values of the corresponding piezoelectric coefficient in fine-grain NBTR samples. © 2021 The Chinese Ceramic Society