The metastable nanocrystalline gamma form of gallium oxide has been prepared and its microstructure and thermochemistry have been studied for the first time by employing X-ray and electron diffraction, high-resolution transmission electron microscopy, adiabatic and differential scanning calorimetry. The randomly oriented crystallites of maximum 5 nm in size have been observed. The sponge-like morphology of gamma-Ga2O3 particles may explain the high specific surface area, previously reported for this material. The defect spinel-type structure of gamma-Ga2O3 is similar to that of gamma and eta-Al2O3. Up to 5.7 wt.% of water can be stored in gamma-Ga2O3 and subsequently released at elevated temperatures. Dry gamma-Ga2O3 specifically absorbs atmospheric water at room temperature. The transformation of gamma-Ga2O3 into stable beta-Ga2O3 occurs in two steps. In the range 650-800 K, gamma'-Ga2O3 is formed in the course of a reversible higher-order phase transition. The latter irreversibly transforms into beta-form above 873 K. The enthalpy of this exothermic transformation is determined as - 19.3 +/- 0.4 kJ (.) mol(-1). The coefficients of the Gibbs energy equation for gamma and gamma'-Ga2O3 have been assessed.