Solid oxide fuel cells (SOFCs) with bi-layer Zirconia/Ceria electrolytes have been studied extensively because of their great potential for producing high power density at reduced operating temperature, important for reducing cost and thereby allowing broader SOFC commercialization. The bi-layer electrolytes are designed to take advantage of the high oxygen ion conductivity of Ceria, the low electronic conductivity of Zirconia, and the low reactivity of Ceria with high-performance cathodes. However, zirconia/ceria processing has proven problematic due to interdiffusion during high temperature co-firing, or ceria layer porosity after two-step firing. Here we first show a new method for bi-layer co-firing at a reduced temperature of 1250 °C, ∼150 °C lower than the usual sintering temperature, achieved using Fe2O3 as a sintering aid. This novel process enables high power density SOFCs by producing: (1) low-resistance Y0.16Zr0.92O2−δ (YSZ)/Gd0.1Ce0.9O1.95 (GDC) electrolytes that also yield high open-circuit voltage, (2) dense GDC layers that prevent reactions between highly-active La0.6Sr0.4Fe0.8Co0.2O3 (LSFC) cathode materials and YSZ, and (3) Ni–YSZ anodes with high electrochemical activity due to fine-scale microstructure with high TPB densities.