Gd-doped CeO2 exhibits an anomalously large electrostriction effect generating stress that can reach 500 MPa. In situ XANES measurements indicate that the stress develops in response to the rearrangement of cerium-oxygen vacancy pairs. This mechanism is fundamentally different from that of materials currently in use and suggests that Gd-doped ceria is a representative of a new family of high-performance electromechanical materials.