The electrical conductivity of highly textured Yttria Stabilized Zirconia (YSZ) thin films deposited onto a MgO substrate can be enhanced significantly at thickness < 60 nm. The structure of these films is characterized by a negligible dislocation network coupled with only one film/substrate interface, which results in the absence of blocking effects. The in-plane conductivity measurements as a function of temperature and film thickness reveal a nanoscale effect with exceptionally high ionic conductivity for film thickness < 60 nm. The observed behavior is attributed to a significant contribution from interface conductivity with decrease in the film thickness. The analysis of presented results was performed using the rule of mixtures model and the lattice (grain) and interface related conductivities were separated. It was estimated that the thickness of interface layer is about 1.6 nm and interfacial conductivity is over three orders of magnitude larger than the lattice related conductivity, which illustrated the tremendous potential of nanoscaled materials. (c) 2005 Elsevier B.V. All rights reserved.