Carbon deposition at Ni/ yttria-stabilized zirconia (YSZ) anodes with and without CeO2 modification (with CeO2 loading of 4.6 wt % in the anode) was investigated in methane with 3% and 10% H2O. The electrochemical performance of the Ni/YSZ anode in methane with 3% H2O deteriorated sharply under open-circuit voltage (OCV) conditions, and the anode was completely ruined due to the formation of solid carbon at the anode after exposure to methane under OCV for 2 h at 850degreesC. The addition of the CeO2 is effective in the suppression of carbon deposition at the Ni/YSZ anode. The CeO2-modified Ni/YSZ anode developed in the present study was successfully operated in methane with 10% H2O at 850degreesC for 3 h under OCV condition without carbon deposition or electrochemical performance deterioration. These attractive results are attributed to the novel microstructure of the CeO2-modified Ni/YSZ anode where the Ni and YSZ particles were homogenously covered with a thin layer of CeO2 with size around 100 nm. (C) 2004 The Electrochemical Society.