CeNbO4.25 is reported to exhibit fast oxygen ion diffusion at moderate temperatures, making this the prototype of a new class of ion conductor with applications in a range of energy generation and storage devices. To date, the mechanism by which this ion transport is achieved has remained obscure, in part due to the long-range commensurately modulated structural motif. Here we show that CeNbO4.25 forms with a unit cell similar to 12 times larger than the stoichiometric tetragonal parent phase of CeNbO4 as a result of the helical ordering of Ce3+ and Ce4+ ions along z. Interstitial oxygen ion incorporation leads to a cooperative displacement of the surrounding oxygen species, creating interlayer "NbO6" connectivity by extending the oxygen coordination number to 7 and 8. Molecular dynamic simulations suggest that fast ion migration occurs predominantly within the xz plane. It is concluded that the oxide ion diffuses anisotropically, with the major migration mechanism being intralayer; however, when obstructed, oxygen can readily move to an adjacent layer along y via alternate lower energy barrier pathways.