A hybrid proton and oxide ion (H+/O2–) conducting electrolyte transports ions in multiple ways can operate at lower operating temperatures than a pure oxide ion conductor in solid oxide fuel cells (SOFCs). Here, a novel hybrid H+/O2– conductor is developed based on Ba0.5Sr0.5Zr0.9Y0.1O3-δ (BSZY) by Gd3+ doping. The Ba0.5Sr0.5Zr0.9-xGdxY0.1O3-δ (x = 0, 0.05, 0.1) electrolytes are modeled to construct crystal structures by density functional theory (DFT) calculations and subsequently synthesized, followed by physicochemical characterizations. The corresponding BSZGdxY electrolyte-based SOFCs are fabricated and investigated in terms of I-V characteristics, electrochemical impedance spectra, and durable operation. It is found Gd3+doping significantly enriches the oxygen vacancies and enhance the ionic conductivity of BSZGdxY. The DFT calculations provide evidence of high oxygen vacancies formation with the optimal doping of Gd with x = 0.1. Among the three samples, the Ba0.5Sr0.5Zr0.8Gd0.1Y0.1O3-δ (BSZGd0.1Y) electrolyte exhibits the highest fuel cell power density of 805 mW cm−2, hybrid H+/O2– conductivity of 0.17 S cm−1, and stable operation for 67 h at 520 °C. Further study finds that the BSZGd0.1Y electrolyte-based fuel cell can be operated under water electrolysis mode, revealing a high current density of 2.37 A cm−2 under 1.5 V at 520 °C. Moreover, the impact of Gd doping is studied in terms of electronic structure and energy bands investigated with the help of DFT calculations and the Schottky junction effect of the cell for electron blocking is investigated. This work demonstrates an efficient way to explore hybrid H+/O2– conduction in BSZY for high-performance SOFC and water electrolysis. © 2024 Elsevier B.V.