Nanostructured YSZ+NiO anodes (fuel electrode) for solid oxide fuel cell (SOFC) were developed by plasma spraying. Influence of processing parameters was correlated with deposit microstructure and properties. During particle in-flight with in the plasma jet, the high temperatures of plasma resulted in an increase in average crystallite size; the nanostructure was, however, conserved. Anodes with well distributed finely porous nanostructure exhibiting high gas permeability, suitable high temperature electronic conductivity, enhanced triple phase boundaries and catalytic activity were produced by controlling plasma enthalpy and velocity. Properties of nanostructured anodes were compared with conventional ones. At room temperature the permeability of nanostructured anodes was an order of magnitude higher than their conventional counter parts whereas in-plane conductivity at 800°C in reducing atmosphere of former was 4% higher than that of the latter. Electrochemical performance of optimized nanostructured anode was compared with conventional NiO+YSZ anodes by testing full cells at 800°C. 9.5 mol% YSZ electrolyte and LSM cathode were deposited onto these anodes for electrochemical testing in static and dynamic conditions. Impedance spectroscopy measurements were performed to collect data on polarization resistance and catalytic behavior of anode layers. Gas and temperature variation on both cells was performed and data was compared. It was established that enlarged reaction zone provided by high specific surface area of nanostructured anodes and finely porous microstructure led to lower activation and concentration polarizations and enhanced cell performance by more than 30% compared to conventional cells. During redox (oxidation and reduction of nickel in anode electrode) cycling the cell composed of nanostructured anode exhibited lower degradation.