The degradation of electrical conductivity in porous nickel-yttria stabilized zirconia composite cermets in a H2/H2O atmosphere under high temperature treatments has been investigated. The parameters varied were: temperature, water partial pressure, and electrical current load. The microstructure was analyzed before and after the treatment by optical microscopy and field emission scanning electron microscopy (FE-SEM). From the optical images the particle size and total amount of Ni, as area fraction, in the sample were measured. By the use of charge contrast (CC) in the FE-SEM particle size and area fraction of percolated Ni was measured. Temperature proved to have the largest effect on the degradation. Samples tested at 1000°C, in contrast to 750°C, showed a severe decrease of conductivity and growth of Ni particles. Higher water partial pressure accelerated Ni particle growth at both temperatures, but the loss of percolation and conductivity at 1000°C was less severe under high water partial pressure. A possible explanation for this behavior is discussed.