This study investigates dimethyl ether (DME) as a potential fuel for proton-conducting SOFCs with a conventional nickel cermet anode and a BaZr 0.4Ce 0.4Y 0.2O 3−δ (BZCY4) electrolyte. A catalytic test demonstrates that the sintered Ni + BZCY4 anode has an acceptable catalytic activity for the decomposition and steam reforming of DME with CO, CH 4 and CO 2 as the only gaseous carbon-containing products. An O 2-TPO analysis demonstrates the presence of a large amount of coke formation over the anode catalyst when operating on pure DME, which is effectively suppressed by introducing steam into the fuel gas. The selectivity towards CH 4 is also obviously reduced. Peak power densities of 252, 280 and 374 mW cm −2 are achieved for the cells operating on pure DME, a DME + H 2O gas mixture (1:3) and hydrogen at 700 °C, respectively. After the test, the cell operating on pure DME is seriously cracked whereas the cell operating on DME + H 2O maintains its original integrity. A lower power output is obtained for the cell operating on DME + H 2O than on H 2 at low temperature, which is mainly due to the increased electrode polarization resistance. The selection of a better proton-conducting phase in the anode is critical to further increase the cell power output.