Composites of silver and BaCe0.8Gd0.2O3 ceramics have been studied as cathode materials for intermediate-temperature solid oxide fuel cells using BaCeO3-based electrolytes. Results indicate that the electrochemical properties of these composites are quite sensitive to the composition and. microstructure of the electrodes. The optimal sliver content of the composites seems to fall within the range of 50 to 70 volume percent, depending on the particular microstructure of the electrode. As compared to pure silver electrodes, the composite electrodes show better adhesion to the electrolyte, higher exchange current densities, and lower cathodic overpotentials under various conditions. The observed high performance of the composite electrodes is attributed primarily to the fine-grained microstructure and high porosity of the composites, as the BaCe0.8Gd0.2O3 phase inhibits grain growth of the silver phase in the composites.