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A new physical mechanism is proposed for generating transient phase gratings in transparent pyroelectric materials. The mechanism combines the pyroelectric and electro-optic effects to convert spatial intensity variations into transient phase gratings. The grating diffraction efficiency increases with a figure of merit that is proportional to the pyroelectric, electro-optic, and absorption coefficients and is inversely proportional to the specific heat. The grating response time is proportional to the specific heat and inversely proportional to the thermal conductivity. Diffraction efficiencies that approach unity are predicted in several readily available electro-optic materials with modest pulse energies from Q-switched Nd:YAG lasers. Observation with cw laser sources is also proposed. The pyro-electro-optic mechanism is compared with other known mechanisms.