Thin films of lead titanate were prepared by a chemically modified sol-gel process and dip-coating technique. The process was refined such that homogeneous crack-free films could be produced which showed excellent waveguiding properties. A 600 degrees C heat treatment was required to obtain the crystallization of the PbTiO3 perovskite phase. The microstructure of the phases was studied using waveguide Raman spectroscopy and transmission electron microscopy. The film was composed of an upper layer of large perovskite grains (similar to 100 nm) on a lower lead content phase which appeared at the layer/substrate interface. This microstructure was related to lead diffusion into the substrate during heat treatment as shown by Rutherford backscattering spectrometry.