Multilayer ceramic capacitors (MLCCs), owing to their processing conditions, can exhibit microstructure defects, such as electrode porosity and roughness. The effect of such extrinsic defects on the electrical performance of these devices needs to be understood to achieve successful miniaturization. To understand the influence of microstructural defects on field distributions and leakage current, the three-dimensional (3-D) microstructure of a local region in MLCCs is reconstructed using a serial-sectioning technique in the focused ion beam. This microstructure is then converted into a finite element model to simulate the perturbations in electric field due to the presence of electrode defects. The electric field is significantly enhanced in the vicinity of such defects, and this is expected to have a bearing on the leakage current density of these devices. To simulate the scaling effects, the dielectric layer thickness is reduced in the 3-D microstructure keeping the same electrode morphology. It is seen that the effect of microstructure defects is more pronounced as one approaches thinner layers, leading to higher local electric field concentrations and a concomitant drop in insulation resistance.