La0.8Sr0.2MnO3(LSM)/Y2O3 stabilized ZrO2(YSZ) composite powders were mechanically prepared. By changing the mechanical conditions, three composite powders with different size distributions were obtained. Then, they were applied into cathodes of solid oxide fuel cells (SOFCs). Microstructures of the cathodes were carefully characterized by scanning electron microscope (SEM). Losses of internal resistance (IR) and polarization between the electrolyte and the cathode were measured with a current interruption technique. The significant change associated with the particle size distribution was observed in the microstructures and the losses.