A novel ionic conductor, BaCe0.8Sm0.2O3−δ–Ce0.8Sm0.2O2−δ (BCS–SDC, weight ratio 1:1), is reported as an electrolyte material for solid oxide fuel cells (SOFCs). Homogeneous BCS–SDC composite powders are synthesized via a one-step gel combustion method. The BCS and SDC crystalline grains play a role as matrix for each other in the composite electrolyte. The composite avoids the typical drawbacks of BCS and SDC, showing not only a better chemical stability than the single phase of BCS but much higher open circuit voltages (OCVs) than the single phase of SDC under the fuel cell conditions. Moreover, BCS–SDC exhibits mixed oxygen ionic and protonic conduction. A total conductivity of 0.0204 S cm−1 at 700 °C is achieved in wet hydrogen (3% H2O), the value of which is comparable with the state-of-the-art proton conductor BaZr0.1Ce0.7Y0.2O3−δ (BZCY). The peak power density achieves 505 mW cm−2 at 700 °C with a 30-μm-thick BCS–SDC electrolyte using wet H2 as the fuel. Resistances of the tested cell under open circuit conditions at different operating temperatures are also investigated by impedance spectroscopy.