A dense La0.9Sr0.1Ga0.8Mg0.2O3−δ (LSGM) film is fabricated using the pulsed laser deposition (PLD) technique on a Ce0.8Sm0.2O2−δ (SDC) electrolyte which is prepared using a co-pressing process on a NiO–SDC anode substrate. The LSGM/SDC bilayer electrolyte cell with Sm0.5Sr0.5CoO3−δ–Ce0.8Sm0.2O2−δ (SSC–SDC, 70:30 wt.%) cathode achieves significantly enhanced cell performance, yielding open circuit voltage (OCV) value of 0.89 V and maximum power density of 758 mW cm−2 at 700 °C. The electrical current leakage in the SDC single layer cell caused by the reduction of Ce4+ to Ce3+ in reducing environment has been eliminated by depositing the LSGM thin film as a blocking layer; besides, the reaction between NiO and LSGM can be prevented due to the dense SDC electrolyte layer. The influence of oxygen pressure and post-annealing temperature on the crystallinity, microstructure and surface roughness of the LSGM films are studied for obtaining a high quality film. Characterization analysis of the cell shows that the bilayer electrolyte deposited by the PLD technique have retained the chemical, mechanical and structural integrity of the cell.