The structure of epitaxial BaTiO3 thin films prepared by hydrothermal synthesis on (001) SrTiO3 substrates was studied by transmission electron microscopy (TEM). The growth evolution was followed from initial island formation, through island impingement and fusion. Plan view and cross-section imaging demonstrated that the films grew by an unusual islanding mechanism. Electron diffraction showed the islands and the fully formed film are single crystal with mosaic character and in all cases strain relaxed. Cross-section TEM of the early growth films showed a several monolayer thick interfacial layer and the film/substrate region had no misfit dislocations. In the fully formed films, this interfacial layer was not observed, however a clear misfit dislocation network was observed. Defects analysis shows that the misfit dislocations have pure edge character with <100> Une directions, and <010> Burgers vectors (parallel to the film/substrate interface).