In situ Raman spectroscopy was used to investigate the real time chemistry occurring in solid oxide fuel cells (SOFCs) operating at 715 degrees C with both dry and humidified ethanol. Electrochemical impedance spectroscopy (EIS) measurements were carried out concurrent with the optical studies to correlate changes in SOFC performance with the appearance of graphite on the anode surface. In cells operating with dry ethanol (diluted in Ar), graphite forms rapidly and the Ni/YSZ anode suffers irreversible structural degradation. With humidified ethanol, degradation is lessened in cells at OCV and can be completely suppressed in polarized cells. The tendency of ethanol to form graphite and the stability of the cermet anode is tied directly to the composition of the fuel mixture that reaches the anode. Ex situ FTIR analysis of the SOFC fuel effluent shows that dry ethanol experiences significant reforming, with CO, CO2, and C2H2 being the primary products. Humidified ethanol leads to the formation of more CO2 and less CO and acetylene.