To improve the water storage capability, electrochemical activity and coking resistance of the Ni+BaZr0.4Ce0.4Y0.2O3-δ (BZCY4) material, the reduction of Zr amount and partial Yb doping on Y site are investigated in this study for its application as anode materials for solid oxide fuel cells (SOFCs) operating on ethanol fuel. It is found that the Ni+BaZr0.1Ce0.7Y0.1Yb0.1O3-δ (BZCYYb) anode presents better water storage capability, coking resistance and electrochemical activity for hydrogen oxidation than Ni+BZCY4 and Ni+BaZr0.1Ce0.7Y0.2O3-δ (BZCY7) anodes. In addition, remarkable cell performance with ethanol as the fuel is obtained with Ni+BZCYYb anodes. For instance, a peak power density higher than 900 mW cm−2 at 750 °C is delivered from a single cell with ethanol as a fuel. Furthermore, a good operational stability is achieved at 600 °C for around 100 h with Ni+BZCYYb anodes operating on ethanol fuel. The good catalytic activity for ethanol–steam reforming, superior coking resistance, high water storage capability, remarkable cell power output and operational stability make these Ni+BZCYYb cermets good candidates as the anodes in intermediate-temperature (IT) SOFCs.