This paper presents the catalytic role of the gadolinia-doped ceria (GDC) and its surface grain boundaries in enhancing the oxygen incorporation kinetics of low-temperature solid oxide fuel cells (LT-SOFC). Epitaxial and polycrystalline GDC thin films were grown by pulsed laser deposition (PLD) on the cathode side of 300 mu m-thick single crystalline (100) and 100 mu m-thick polycrystalline YSZ substrates, respectively. Fuel cell current-voltage behavior and electrochemical impedance spectroscopy measurements were carried out in the temperature range of 350 degrees C-450 degrees C on both types of cells. Results of dc and ac measurements confirm that cathodic resistances of cells with epitaxial GDC layer are lower than that for the YSZ-only control cell. This is attributed to the higher surface exchange coefficient for GDC than YSZ. Moreover, the role of grain boundary density at the cathode side external surface was investigated on surface-engineered electrode-membrane assemblies (MEA) having different GDC surface grain sizes. MEAs having smaller surface grain size show better cell performance and correspondingly lower electrode interfacial resistance. Electrochemical measurements suggest that GDC grain boundaries at the cathode side contribute to enhance oxygen surface kinetics. These results provide an opportunity and a microstructure design pathway to improve performance of LT-SOFCs by surface engineering with nano-granular, catalytically superior thin GDC cathodic interlayers. (C) 2011 The Electrochemical Society. [DOI: 10.1149/2.001112jes] All rights reserved.