Doped ceria-based materials are potential electrolytes for use in lower operating temperature (500-700 degrees C) solid oxide fuel cells because of their high ionic conductivity. In this study, impedance behaviour and microstructure of the (Ce0.8Gd0.2)O-1.9 exposed to mild fuel environments (H-2-N-2 mixtures) have been investigated. The exposure of specimens to H-2-N-2 mixtures at 1000 degrees C resulted in a substantial expansion of the lattice as a consequence of the reduction of Ce4+ to Ce3+, which in turn led to the development of microcracks and loss of continuity at the grain boundary region and increase in both the grain boundary (major effect) and the lattice (minor effect) resistivity. The behaviour for the grain boundary resistivity after the 800 degrees C exposure was somewhat similar although expansion of the lattice at 800 degrees C (or lower temperatures) was considerably less conspicuous. After exposure to H-2-N-2 atmosphere at lower temperatures (650 and 500 degrees C), although no significant increase in the grain boundary resistivity for exposures up to 1000 h was observed, the shape of the grain boundary are was clearly affected. The large increase in the grain boundary resistivity in reduced specimens has been attributed to the observed microcracking, loss of continuity between grains and possibly the formation of new phase regions with extremely poor oxygen-ion conductivity along grain boundaries during the reduction. The disruption to the microstructure is not recovered on subsequent oxidation in air.