We have previously shown that dense nanocrystalline CeO2−x of approximately 10 nm grain size exhibits enhanced electrical conductivity and an enthalpy of reduction that is more than 2.4 eV lower than that for conventional ceria [1, 2]. These effects were attributed to preferential interface reduction. In this work, we investigated the relationship between interfacial area, heat treatment conditions, and conductivity by varying the grain size of dense samples through annealing at various temperatures. It is shown that the conductivity does not scale in direct proportion to interfacial area. Moderate temperature (700 °C) anneals which change the grain size by only a few nanometers reduce the conductivity by three orders of magnitude. It is suggested that atomistic relaxation occurs at the interfaces, and eliminates many low energy defect sites.