The electronic structure and magnetism of Cobalt doped BaTiO3 (BaTi1-xCoxO3) is investigated. Substitutional Nitrogen on an Oxygen site is found to play an important role in inducing net magnetic moments in the system. The presence of a Nitrogen atom as nearest neighbour to a Cobalt atom is crucial in producing spin splitting of both the Nitrogen and Cobalt states thereby introducing a net local magnetic moment. The introduction of Nitrogen is further found to enhance ferromagnetic interactions between Cobalt atoms. Copyright 2012 Author(s). This article is distributed under a Creative Commons Attribution 3.0 Unported License. [http://dx.doi.org/10.1063/1.4747820]