La3Ni2O7-delta (delta = 0.65) was synthesized by hydrogen reduction of the parent La3Ni2O7 Ruddlesden-Popper nickelate. The crystal structure of La3Ni2O6.35 (space group: I4/mmm, a = 3.8742 (1) angstrom and c = 20.055 (1) angstrom) has been determined from powder neutron diffraction data by the Rietveld method for the first time. The oxygen vacancies are located in the LaOx planes between two of the NiO2 layers. Removal of these oxygen atoms from the parent phase results in a significant (similar to 0.4 angstrom) shrinkage of the perovskite block along c-direction and splitting of the Ni position. The major part of Ni cations is surrounded by five oxygen atoms forming square pyramids, while the rest are coordinated to six octahedrally arranged oxygen atoms. Over the 170-400 K temperature range, the conductivity of La3Ni2O6.35 follows Mott's variable range hopping model modified for a 2D case. (C) 2006 Elsevier Ltd. All rights reserved.