A new type of nanocrystalline samarium-doped-ceria/yttrium-stabilized-zirconia (SDC/YSZ) heterophase thin film electrolytes was synthesized on MgO and Si substrates by spin coating and thermal treatment of SDC-nanoparticle-incorporated polymeric precursors. In the heterophase films, SDC nanoparticles were uniformly dispersed in a nanocrystalline YSZ matrix. The heterophase structure was stable when fired in air at temperatures up to 850 °C. The nanocrystalline heterophase thin films exhibited electrical conductivities significantly higher than that of the phase-pure YSZ and SDC nanocrystalline thin films at reduced temperatures. The effects of SDC grain size and volume fraction on the electrical conductivity of the heterophase films were also studied