We investigated the effect of inner electrode composition on the microstructure and electromechanical properties of Bi-0.5(Na0.82K0.18)(0.5)TiO3 (BNKT) multilayer ceramic actuators. Using tape-casting and screen printing techniques, multilayered laminates were prepared by stacking green sheets of Nb-modified BNKT ceramic layers with AgPd (70/30 in weight ratio) thick films as the inner electrode. After co-firing at temperatures of 1100-1140 degrees C for 4 h in air, the multilayered structure revealed significant camber as well as cracks due to the mismatch in thermal shrinkage between the ceramic and the AgPd layer. However, the addition of 10 wa% (K0.47Na0.51Li0.02)(Nb0.8Ta0.2)O-3 (KNLNT) powder into the inner electrode markedly suppressed the generation of co-firing-induced defects. More surprisingly, the normalized electric-field induced strain (S-max/E-max) of BNKT multilayer actuators was enhanced from 110 pm/V to 350 pm/V by adding ceramic KNLNT into the AgPd inner electrode.