Hydration and oxidation of gadolinium-doped barium cerate, a system with highly promising properties when used as electrolyte for protonic ceramic fuel cells, are investigated by means of density functional calculations. The energy landscape of oxygen vacancies and interstitial protons in this strongly distorted orthorhombic perovskite is computed. Although the most stable sites for protons are found in the close vicinity of the dopant, the picture of a very complex energy landscape emerges, in which some sites far away from Gd are found more stable than other ones in its close vicinity, due to the highly distorted geometry of the hostmaterials. The fully hydrated phase can be approximated by a structure with 16 local minima. Both hydration (water incorporation) and oxidation (oxygen incorporation) are found to be exothermic processeswith reaction enthalpies of−1.34 eV/H2Omolecule and −0.70 eV/O atom, respectively. The hole polaron resulting from the exothermic incorporation of oxygen is found localized on oxygens around the dopant (small polaron) and carries a spin magnetic moment. Finally, the competition between hydration and oxidation is studied and discussed as a function of oxygen and water partial pressures.