Functionally graded composite interlayer based on 50% of La0.54Sr0.4Co0.2Fe0.8O3-δ and 50% of La0.54Sr0.4Fe0.2Co0.8O3-δ (CF-1) and cobalt and gadolinium doped ceria (CoCGO) is synthesized varying the mass ratio as CF-1:CoCGO = 80:20(L80-C20), 50:50(L50-C50) and 20:80(L20-C80). Detail study using impedance spectroscopy of symmetrical cell fabricated with CoCGO as electrolyte reveals the lowest electrode polarization 0.04 Ω cm2 at 800 °C for L80-C20 composite. Electrode and ohmic polarization is also evaluated configuring the symmetric cell as CF-1/L80-C20||CoCGO||L80-C20/CF-1. Symmetric cell with varying composition of the composite interlayer (L80-C20/L50-C50/L20-C80||CoCGO||L20-C80/L50-C50/L80-C20) shows considerably low electrode polarization of 0.067 Ω cm2 at 800 °C with activation energy 1.19 eV. Electrochemical performances evaluated using single cell configuration Ni-YSZ||YSZ||CoCGO/L20-C80/L50-C50/L80-C20/CF-1 shows power density as high as 2.03 W cm−2 at 800 °C at 0.7 V. Addition of composite interlayers increases the stability significantly and the voltage degradation is found negligible (0.9%) for first 300 h at a constant load of 0.5 A cm−2 which is further increased to 2.9% for next 300 h. The cell stability is clinically correlated with layer wise elemental ‘Sr’ mapping in the applied quad interlayers. © 2016 Elsevier B.V.