The temperature and frequency dependent dielectric and conductivity properties were measured on as-sintered as well as oxygen annealed KNbO3 ceramics. The results show that in addition to phase transition peaks, well defined relaxation peaks are observed in the temperature range 450–700 K. These peaks could be suppressed by annealing the samples in the oxygen atmosphere. The dc conductivity and maximum dielectric constant values decreases after oxygen annealing. Activation energy, calculated from dielectric relaxation and conductivity data on the samples, suggests that both the processes are due to doubly charged oxygen vacancies formed during sintering process. Dielectric relaxation is attributed to the hopping of oxygen vacancies in the six equivalent sites in perovskite structure. The dielectric and conductivity behaviors are influenced by the density of the samples. The results are explained on the basis of defect concentration and their dynamics.