The microscopic origin of the grain size effects on the dielectric, piezoelectric, and thermal depoling properties of Aurivillius phase Bi3.15Nd0.85Ti3O12 was investigated. Using atomic force microscopy, domain walls were observed in micrometer grain size ceramics, but gradually disappeared with reducing grain size and were not found in ceramics with 90 nm grain size. In strain-electric field butterfly loops, the strain decreased with decreasing grain size indicating a decreasing contribution of non-180° domain walls switching to the strain. Lattice distortion (a−b)/b decreased with decreasing grain size. The thermal depoling resistance decreased with decreasing grain size, due to increasing internal mechanical stresses.