A facile and environmentally benign method for single-phase barium titanate synthesis in a water vapor medium was studied to reveal the mechanism of phase transformation of the initial simple oxide mixture and estimate the capability of the product to be used as a raw material for low-frequency dielectric ceramics. The composition and structure of the reactants’ mixture, treated in vapor at 130–150 °C as well as at 230 °C for various time periods, were investigated by means of XRD, SEM, TEM, EDX, and FTIR methods. The kinetics of the occurring phase transformation can be described using the Johnson–Mehl–Avrami–Erofeev equation. The reaction between the initial oxides was considered as a topochemical process with an apparent activation energy of 75–80 kJ mol−1. A crucial role in this process belonged to the water vapor medium, which facilitated the generation of the reaction zone and the spreading inward of the solid particles. The synthesized tetragonal barium titanate powder (mean particle size of 135 nm) was sintered using a conventional technique at 1250 °C to obtain ceramics with grains of about 2 μm. Capacitance measurements identified a permittivity and dielectric loss factor of the ceramics that reached 3879 and 6.7 × 10−3, respectively, at 1 kHz and room temperature.