A study of nanocrystalline oxide thin film processing and influence of microstructure on the electrical properties of nanocrystalline Gd3+-doped CeO2 thin films was reported. Nanocrystalline films on sapphire substrate were prepared using a polymeric precursor spin coating technique. The grain size of these films depends upon the annealing temperatures and the dopant content, where higher content of dopant realized smaller grain size. The electrical conductivity of nanocrystalline Gd3+- doped CeO2 thin films was studied as a function of temperature and oxygen activity, and correlated with the grain size. The results show that the electronic conductivity of CeO2 increases, whereas the ionic conductivity increases in doped samples as the grain size decreases. From these results, the enthalpy of oxygen vacancy formation was determined as a function of grain size. For CeO2 sample, an enhancement of electronic conductivity was observed with decreasing grain size below 100 rim. In the case of Gd3+-doped CeO2, the electrical conductivity results show that an increase of the ionic conductivity was observed as the grain size decreased, which is related to a decrease in the activation energy for the ion mobility.