Optimization of the electrolyte and the fuel electrode has been performed to increase the output power density of intermediate-temperature solid oxide fuel cells (IT-SOFCs). In order to fabricate novel fuel-electrodes, Gadolinium doped ceria (GDC) powder, which incorporates nano-sized Ru or GDC particles, was developed. The heating rate at sintering of electrolyte was optimized to obtain fine-grained structure for thinner electrolyte by increasing the material strength. For enhanced conversion of methane into hydrogen inside the cell-stack, a fuel-side current collector containing a mixture of nickel and doped ceria (GDC or SDC) with Ru nanoparticles was developed. Maximum output power density of 0.55W/cm2 was obtained with fuel utilization of 75% at 750°C.