The effects of N $b_2$ $O_{5}$ and oxygen potential on the densification and grain growth of U $O_2$ fuel have been investigated.0.3 wt% N $b_2$ $O_{5}$ -doped U $O_2$fuel pellets were sintered at 1$700^{circ}C$ for 4 hours in sintering atmospheres which have various ratios of $H_2O$ to $H_2$ gas. Compared with those of undoped U $O_2$ pellets, the sintered density and grain size of the 0.3 wt% N $b_2$ $O_{5}$ -doped U $O_2$ pellet increase under the $H_2O$/ $H_2$ gas ratio of 5.0$ imes$10$^{-3}$ to 1.0$ imes$10$^{-2}$ and under the $H_2O$/ $H_2$gas ratio of 5.0$ imes$10$^{-3}$ to $1.5 imes$10$^{-2}$ , respectively. The sintering of U $O_2$fuel pellets containing 0.1 wt% to 0.5 wt% N $b_2$ $O_{5}$ was carried out at 168$0^{circ}C$ for 4 hours. The enhancing effect of N $b_2$ $O_{5}$ on the sintered density and grain size becomes larger as the N $b_2$ $O_{5}$ content increases. The solubility limit of N $b_2$ $O_{5}$ in U $O_{2}$ seems to be between 0.3 wt% and 0.5 wt%, and beyond the solubility limit the second phase whose composition corresponds near to N $b_2$U $O_{6}$ is precipitated on grain boundary. The enhancement of densification and grain growth in U $O_2$ is attributed to the increased concentration of a uranium vacancy which is formed by the interstitial N $b^{4+}$ ion in the U $O_2$ lattice.