This study was aimed at developing a suitable reforming catalyst for later application in an indirect internal reforming solid oxide fuel cell (IIR-SOFC) fuelled by dimethyl ether (DME). It was found that, at temperature higher than 800 °C, DME decomposed homogeneously, producing CH4 and CH3OH with small amount of CO, CO2, and H2. High surface area Ce–ZrO2 can reform DME with steam efficiently at 900 °C, producing high contents of H2, CO, and CH4 without the presence of CH3OH in the product gas. The combination use of Ce–ZrO2 (as a pre-reforming catalyst) and Ni/Al2O3 in the single unit was proven to significantly improve the reforming performance. According to this combination, the role of Ce–ZrO2 is to first decompose CH3OH and some CH4 generated from the homogeneous decomposition of DME, while the role of Ni/Al2O3 is to reform CH4 left from the pre-reforming section and to maximize the yield of H2 production. As another approach, IIR-SOFC model was studied using an annular ceramic reactor, in which DME initially reacted with steam on Ce–ZrO2 + Ni/Al2O3 at the inner side of the reactor and then Ni/YSZ at the outer side. The stability and the yield of hydrogen production over this configuration were considerably higher than those of systems packed with single Ce–ZrO2, single Ni/Al2O3, and without the filling of catalyst. In addition, the degree of carbon formation on the surface of Ni/YSZ was significantly low. The successful development of this reforming pattern improves the efficiency of IIR-SOFC fueled by DME by eliminating the requirement of an external reforming unit installation.