BaZr0.7Sn0.1Y0.2O3–δ (BZSY) is developed as a novel chemically stable proton conductor for solid oxide fuel cells (SOFCs). BZSY possesses the same cubic symmetry of space group Pm-3m with BaZr0.8Y0.2O3-δ (BZY). Thermogravimetric analysis (TGA) and X-ray photoelectron spectra (XPS) results reveal that BZSY exhibits remarkably enhanced hydration ability compared to BZY. Correspondingly, BZSY shows significantly improved electrical conductivity. The chemical stability test shows that BZSY is quite stable under atmospheres containing CO2 or H2O. Fully dense BZSY electrolyte films are successfully fabricated on NiO–BZSY anode substrates followed by co-firing at 1400 °C for 5 h and the film exhibits excellent electrical conductivity under fuel cell conditions. The single cell with a 12-μm-thick BZSY electrolyte film outputs by far the best performance for acceptor-doped BaZrO3-based SOFCs. With wet hydrogen (3% H2O) as the fuel and static air as the oxidant, the peak power density of the cell achieves as high as 360 mWcm−2 at 700 °C, an increase of 42% compared to the reported highest performance of BaZrO3-based cells. The encouraging results demonstrate that BZSY is a good candidate as the electrolyte material for next generation high performance proton-conducting SOFCs.