Significant recent interest has been directed towards the relationship between interfaces and reports of enhanced ionic conductivity. To gain a greater understanding of the effects of hetero-interfaces on ionic conductivity, advanced analytical techniques including electron microscopy (TEM/STEM), electron energy loss spectroscopy (EELS), and secondary ion mass spectrometry (SIMS) are used to characterize CeO2/Ce0.85Sm0.15O2 multilayer thin films grown by pulsed laser deposition. High quality growth is observed, but ionic conductivity measured by impedance spectroscopy and 18O tracer experiments is consistent with bulk materials. EELS analysis reveals the unusual situation of layers containing only Ce(IV) adjacent to layers containing both Ce(III) and Ce(IV). Post oxygen annealing induced oxygen diffusion and mixed oxidation states in both layers, but only in the vicinity of low angle grain boundaries perpendicular to the layers. The implications of the anomalous behavior of the Ce oxidation states on the design of novel electrolytes for solid oxide fuel cells is discussed.