In this work, Ni+BaZr0.4Ce0.4Y0.2O3-δ (Ni+BZCY) anode with high water storage capability is used to increase the sulfur tolerance of nickel electrocatalysts for solid oxide fuel cells (SOFCs) with oxygen-ion conducting Sm0.2Ce0.8O1.9 (SDC) electrolyte. Attractive power outputs are still obtained for cell with Ni+BZCY anode operating on hydrogen fuels containing 100-1000 ppm H2S, while for a similar cell with Ni+SDC anode it displays much reduced performance by introducing only 100 ppm H2S into hydrogen. Operating on a hydrogen fuel containing 100 ppm H2S at 600 oC and a fixed current density of 200 mA cm-2, a stable power output of 148 mW cm-2 is well maintained for a cell with Ni+BZCY anode within a test period of 700 min, while it was decreased from an initial value of 137 mW cm-2 to only 81 mW cm-2 for a similar cell with Ni+SDC anode after a test period of only 150 min. After the stability test, loss of Ni percolating network and reaction between nickel and sulfur are appeared over Ni+SDC anode, but it is not observed for Ni+BZCY anode. It highly promises the use of water-storing BZCY as anode component in improving sulfur tolerance for SOFCs with oxygen-ion conducting SDC electrolyte.