(001)-epitaxial (Ba0.5Sr0.5)TiO3 (BST) thin films with different magnitudes of compressive strain were fabricated on SrRuO3/SrTiO3 substrates by pulsed laser deposition, and their electro-optic (EO) properties were characterized by modulation ellipsometry at different temperatures. All fabricated films showed an increased paraelectric-to-ferroelectric phase transition temperature upon compressive strain and revealed c-domain structures in the ferroelectric phase. We experimentally clarified that the EO properties of compressively strained BST thin films are enhanced toward the phase transition temperature modified by the strain. The experimental results were compared with the theoretical prediction based on a phenomenological thermodynamic model. Although the measured EO coefficient r(c) was less than that theoretically predicted, the experimentally observed strain effect on the EO properties is in good qualitative agreement. Published under license by AIP Publishing.