Nanoparticles of palladium-doped cerium oxide (Pd-CeO(2)) have been prepared by aqueous co-precipitation resulting in a single phase cubic structure after calcination according to X-ray diffraction (XRD). Inhomogeneous strain, calculated using the Williamson-Hall method, was found to increase with palladium content, and the lattice contracts slightly, relative to nano-cerium oxide, as palladium content is increased. Moreover, high resolution transmission electron microscopy reveals some instances of defective microstructure. These factors combined imply that palladium is in solid solution with CeO(2) in these nanoparticles, but palladium (II) oxide (PdO) peaks in the Raman spectra indicate that solid solution formation is partial and that highly dispersed PdO is present as well as the solid solution. Nevertheless, the addition of palladium to the CeO(2) lattice inhibits the growth of the 6% Pd-CeO(2) particles compared to pure CeO(2) between 600 and 850 A degrees C. Activation energies for grain growth of 54 +/- A 7 and 79 +/- A 8 kJ/mol were determined for 6% Pd-CeO(2) and pure CeO(2), respectively, along with pre-exponential Arrhenius factors of 10 for the doped sample and 600 for pure cerium oxide.