The microstructure of metal-organic deposited YBa 2 Cu 3 O 7− δ with dysprosium (Dy) additions has been investigated by transmission electron microscopy (TEM). Dy additions which increase the density of normal-state nanoparticles in the YBCO have been demonstrated to enhance the critical current densities in moderate magnetic fields. The influence of nanoparticles, stacking faults and other planar defects on flux pinning is discussed. We observed a high density of nanoparticles in the size range of 10–50 nm, which may act as flux pinning centres to enhance the critical current density of the material. Stacking faults and planar defects are observed which may also be effective flux pinning centres in YBCO samples with and without Dy addition.