Ultrathin crystalline films of 10 mol% gadolinia-doped ceria (CGO10) are grown on MgO (100) substrates by pulsed laser deposition at a moderate temperature of 400°C. As-deposited CGO10 layers of approximately 4 nm, 14 nm, and 22 nm thickness consist of fine grains with dimensions ≤∼11 nm. The films show high density within the thickness probed in the X-ray reflectivity experiments. Thermally activated grain growth, density decrease, and film surface roughening, which may result in the formation of incoherent CGO10 islands by dewetting below a critical film thickness, are observed upon heat treatment at 400°C and 800°C. The effect of the grain coarsening on the electrical characteristics of the layers is investigated and discussed in the context of a variation of the number density of grain boundaries. The results are evaluated with regard to the use of ultrathin CGO10 films as seeding templates for the moderate temperature growth of thick solid electrolyte films with improved oxygen transport properties.