The simulation optimization and an experimental demonstration of improved performances of mega-electron-volt ultrafast electron diffraction (MeV UED) are reported in this paper. Using ultrashort high quality electron pulses from an S-band photocathode rf gun and a polycrystalline aluminum foil as the sample, we experimentally demonstrated an improved spatial resolution of MeV UED, in which the Debye-Scherrer rings of the (111) and (200) planes were clearly resolved. This result showed that MeV UED is capable to achieve an atomic level spatial resolution and a approximately 100 fs temporal resolution simultaneously, and will be a unique tool for ultrafast structural dynamics studies.