Extended X-ray absorption fine structure spectroscopy (EXAFS) was used to determine the interatomic distances in both strain-free and strained thin films of Ce0.8Gd0.2O1.9. It was found that in response to compressive strain, the Ce4+ ion undergoes an anomalously large shift away from the oxygen vacancy. This finding offers a microscopic explanation for the elastic anomalies observed in Ce0.8Gd0.2O1.9.