Vertical interfaces in vertically aligned nanocomposite thin films have been approved to be an effective method to manipulate functionalities. However, several challenges with regard to the understanding on the physical process underlying the manipulation still remain. In this work, because of the ordered interfaces and large interfacial area, heteroepitaxial (BaTiO3)1-x:(Sm2O3)x thin films have been fabricated and used as a model system to investigate the relationship between vertical interfaces and dielectric properties. Due to a relatively large strain generated at the interfaces, vertical interfaces between BaTiO3 and Sm2O3 are revealed to become the sinks to attract oxygen vacancies. The movement of oxygen vacancies is confined at the interfaces and hampered by the misfit dislocations, which contributed to a relaxation behavior in (BaTiO3)1-x:(Sm2O3)x thin films. This work represents an approach to further understand that how interfaces influence on dielectric properties in oxide thin films.