Thin films of Ce0.8Gd0.2O1.9-δ (CGO) are deposited by flame spray deposition with a deposition rate of about 30 nm min−1. The films (deposited at 200 °C) are dense, smooth, and particle-free and show a biphasic amorphous/nanocrystalline microstructure. Isothermal grain growth and microstrain are determined as a function of dwell time and temperature and correlated to the electrical conductivity. CGO films annealed for 10 h at 600 °C present the best electrical conductivity of 0.46 S m−1 measured at 550 °C. Reasons for the superior performance of films annealed at low temperature over higher-temperature-treated samples are discussed and include grain-size evolution, microstrain relaxation, and chemical decomposition. Nanoindentation measurements are conducted on the CGO thin films as a function of annealing temperature to determine the hardness and elastic modulus of the films for potential application as free-standing electrolyte membranes in low-temperature micro-SOFCs (solid oxide fuel cells).