A thin layer of a vertically aligned nanocomposite (VAN) structure is deposited between the electrolyte, Ce0.9Gd0.1O1.95 (CGO), and the thin-film cathode layer, La0.5Sr0.5CoO3 (LSCO), of a thin-film solid-oxide fuel cell (TFSOFC). The self-assembled VAN nanostructure contains highly ordered alternating vertical columns of CGO and LSCO formed through a one-step thin-film deposition process that uses pulsed laser deposition. The VAN structure significantly improves the overall performance of the TFSOFC by increasing the interfacial area between the electrolyte and cathode. Low cathode polarization resistances of 9 x 10(-4) and 2.39 Omega were measured for the cells with the VAN interlayer at 600 and 400 degrees C, respectively. Furthermore, anode-supported single cells with LSCO/CGO VAN interlayer demonstrate maximum power densities of 329, 546, 718, and 812 mW cm(-2) at 550, 600, 650, and 700 degrees C, respectively, with an open-circuit voltage (OCV) of 1.13 V at 550 degrees C. The cells with the interlayer triple the overall power output at 650 degrees C compared to that achieved with the cells without an interlayer. The binary VAN interlayer could also act as a transition layer that improves adhesion and relieves both thermal stress and lattice strain between the cathode and the electrolyte.