Palladium-impregnated La0.75Sr0.25Cr0.5Mn0.5O3-delta/yttria-stabilized zirconia (LSCM/YSZ) composite anode is investigated in detail for the direct utilization of methane in solid oxide fuel cells (SOFCs). Impregnation of Pd nanoparticles significantly promotes the electrocatalytic activity of LSCM/YSZ composite anodes for the methane electro-oxidation reaction in wet CH4. At 800 degrees C, the electrode polarization resistance for the methane oxidation is reduced by a factor of 3 after impregnation of 0.10-0.66 mg cm(2) Pd. Pd impregnation primarily enhances the electrode processes at low frequencies, indicating the significant promotion effect on the oxygen transfer process and the CH4 decomposition for the reaction on the LSCM/YSZ composite anodes. No carbon deposition was observed for the reaction in wet CH4 on Pd-impregnated LSCM/YSZ composite anodes. In contrast, Pd impregnation has little effect on the hydrogen oxidation in wet H-2. The results demonstrate that the Pd-impregnated LSCM/YSZ composite is a promising carbon-tolerant anode for natural gas fuel-based SOFCs. (C) 2008 The Electrochemical Society.