Steady generation of electricity (360 mW cm-2 at 1173 K) with dry methane fuel was successfully performed in solid oxide fuel cells (SOFC) by Pd-Ni bimetallic catalyst on porous composite anode prepared from La0.8Sr0.2CrO3 (LSCr) and Ce0.8Sm0.2O1.9 (SDC) (50:50 wt%). The amounts of carbon deposition were quite small under the open and closed circuit conditions. Synergy of Pd and Ni electrocatalysts was observed on the LSCr-SDC anode for the oxidation of dry methane. A small amount of carbon deposition over the anode during the open circuit conditions could be easily and quickly removed by gasification with steam. Data of detailed kinetic studies and electrochemical analysis strongly suggest that (i) methane decompose to hydrogen and carbon over the Pd-Ni catalyst, (ii) hydrogen is electrochemically oxidized with O2- to water, and (iii) carbon is quickly reformed with water to hydrogen and carbon oxides.