Compositions of lithium niobate containing 4.5 at.% or more MgO have the ability to transmit, without distortion, light 100 times as intense as undopecl compositions. Holographic diffraction measurements of photorefraction have demonstrated that the improved performance is due to a hundredfold increase in the photoconductivity, rather than to a decrease in the Glass current. The damage-resistant compositions are also distinguished by a thermal activation energy of 0.1 eV for the diffraction efficiency, an OH-stretch vibration at 2.83 Am, a lattice phonon absorption at 21.2 Am, an electron spin resonance signal for Fe impurities at 1500 G, and, after reduction by heating in a vacuum, an optical absorption band at 1.2 um. (The corresponding values for undopedl LiNbO3 are 0.5 eV, 2.87 um, 21.8 um, 790 G, and 0.5 um, respectively.) The high photoconductivity is thus related to a distinctive electronic environment for impurities in the damage-resistant crystals. The photoconductivity strongly affects the impedance and time constants of signal processing devices made of LiNbO3.