MgB2 samples synthesized by solid-state reaction were found to contain several types of crystalline defects, including Mg deficiency, coherent precipitates, screw dislocations, and oxygen impurity, depending on the synthesis conditions. The Mg, deficiency introduced significant strain in the crystalline lattice of MgB2. A high density of screw dislocations lying on (0001) planes with a Burgers vector of (1120) partially relieved the lattice strain. The remnant strain in the MgB2 lattice directly determines the critical superconducting temperature, which decreases with strain. A small amount of oxygen dissolved in the MgB2 matrix is not responsible for lowering T-c observed in our samples.