This paper reports both experimental and theoretical results of the role of surface modification on the oxygen reduction reaction in low-temperature solid oxide fuel cells (LT-SOFC). Epitaxial ultrathin films of yttria-doped ceria (YDC) cathode interlayers (<10–130 nm) are grown by pulsed laser deposition (PLD) on single-crystalline YSZ(100). Fuel cell current–voltage measurements and electrochemical impedance spectroscopy are performed in the temperature range of 350 °C ≈ 450 °C. Quantum mechanical simulations of oxygen incorporation energetics support the experimental results and indicate a low activation energy of only 0.07 eV for YDC, while the incorporation reaction on YSZ is activated by a significantly higher energy barrier of 0.38 eV. Due to enhanced oxygen incorporation at the modified Pt/YDC interface, the cathodic interface resistance is reduced by two-fold, while fuel cell performance shows more than a two-fold enhancement with the addition of an ultrathin YDC interlayer at the cathode side of an SOFC element. The results of this study open up opportunities for improving cell performance, particularly of LT-SOFCs by adopting surface modification of YSZ surface with catalytically superior, ultrathin cathodic interlayers.