X-ray diffraction (XRD) patterns, electron paramagnetic resonance (EPR) powder spectra (9 and 34 GHz) and the magnetic susceptibility of BaTiO3 + 0.04 BaO + x/2 Co2O3 (0.001 ⩽ x ⩽ 0.02) ceramics were studied to investigate the incorporation of Co ions in the BaTiO3 lattice and their valence states as well as the development of the hexagonal phase (6H modification) in dependence on doping level x and sintering temperature Ts. At Ts = 1400 °C the 6H modification begins to occur at a nominal Co concentration x of about 0.001 and for x > 0.005 the samples are completely hexagonal at room temperature. Two different EPR spectra were observed in the 6H modification of BaTiO3, which were both assigned to paramagnetic Co2+ ions located at the two crystallographically non-equivalent Ti sites in 6H-BaTiO3. The EPR g tensor values as well as the molar paramagnetic susceptibility, measured in the temperature range 5 K–300 K at a magnetic field of 9 T, were analyzed in the framework of the ligand field theory using the program CONCORD. The combination of EPR and magnetic measurements reveals that in air-sintered 6H BaTiO3, the incorporated Co occurs as a mixture of paramagnetic Co2+ and diamagnetic Co3+ ions, whereas in samples annealed in reducing atmosphere the majority of Co is in the divalent state. The occurrence of Co4+ can be excluded for all investigated samples. The sample color caused by Co2+ and Co3+ ions is beige/light yellow and dark grey/black, respectively. The majority of the Co2+ ions substitutes Ti in the exclusively corner-sharing oxygen octahedra possessing nearly cubic symmetry. The corresponding ligand field parameter amounts to about −28 000 cm−1 (Wybourne notation, 10Dq ≈ 20 000 cm−1). In the reduced samples nearly 5% of the detected Co2+ ions occupy the Ti site in the face-sharing oxygen octahedra, which are significantly trigonally distorted. The negative sign of the obtained ligand field parameter ≈ −7300 cm−1 reflects a compression of this octahedron in direction of the hexagonal c-axis.