Because initial reports suggested that the nano-domains found in gadolinia-doped ceria, a material used amongst other things as an electrolyte in solid oxide fuel cells, could have a B-type rare earth oxide structure, atomistic models were developed to incorporate the B-type structure into the host fluorite structure. A one-to-one correspondence was discovered between the cation positions in monoclinic B-type structure and those in the cubic fluorite structure, which allows in principle the incorporated B-type structural element to retain its monoclinic symmetry. Defect energy calculations showed, however, that the incorporation of the gadolinia only becomes favorable when the initial B-type structure was partially converted into the C-type structure, thus suggesting that nano-domains are more likely to adopt a C-type arrangement. The calculations also indicated that oxygen diffusion plays a central role in the B- to C-type phase transition in gadolinia. (C) 2010 Elsevier B.V. All rights reserved.