Heterovalent B-site MgO substitution in the Nd2Zr2O7-system (Nd2Zr2−xMgxO7−x) has been explored. The pyrochlores were synthesized by a polymeric sol-gel method and characterized by X-ray diffraction (XRD), Raman spectroscopy and Scanning Electron Microscopy to determine structure, phase composition and microstructure. Impedance Spectroscopy (IS) was employed to study the electrical behavior of the ceramics over the ranges 200–800 °C and under pure N2 and O2. The XRD showed that the solid solution limit was x > 0.02 and all the materials show a cubic Fd3̅m structure. The Raman results confirm the structural disorder created by the introduction of Mg2+ and the subsequent generation of oxygen vacancies. The IS data shows a dramatical increase of the oxide-ion conductivity when doping and that the conductivity depends strongly on the atmosphere, leading to p-type semiconductivity under pure O2 atmosphere. The present study highlights the use of heterovalent dopants to drastically increase the oxide-ion conductivity of pyrochlore-like materials.