Aqueous sol derived ferroelectric PbTiO 3 thin films have been deposited on Si(100) substrates. Films crystallized by annealing at 675 • C, which exhibit the best ferroelectric properties and also excellent varistor-type behaviour, have been investigated in detail by TEM and x-ray diffraction. There is a partially preferred orientation of the crystallized grains of the perovskite phase along the (110) and (101) directions. During annealing, Si from the substrate diffuses into the films and forms an amorphous Si-O rich phase at the boundaries of the equiaxed grains of the perovskite phase. The formation of this amorphous phase is expected to increase the resistivity of the grain boundaries and consequently promote varistor-type behaviour. Domains were observed within the equiaxed grains and they exhibited a needle-like morphology. In a single grain, either a set of parallel domains or two sets of differently oriented parallel domains were observed. With increased diffusion of Si from the substrate, the fraction of the amorphous phase in the microstructure increased. The amorphous phase penetrated the domain boundaries within a single grain, eventually isolating the needle-like domains. The resulting microstructure consisted of needles of the perovskite phase in an amorphous matrix.