Growth of carbon nanotubes (CNTs) catalyzed by zirconia nanoparticles was observed in the Ni–yttria doped zirconia (YSZ) composite cathode of a solid oxide electrolysis cell (SOEC) at approximately 875 °C during co-electrolysis of CO2 and H2O to produce CO and H2. CNT was observed to grow under large cathodic polarizations specifically at the first 1 to 2 μm Ni–YSZ active cathode layer next to the YSZ electrolyte. High resolution transmission electron microscopy (HRTEM) shows that the CNTs are multi-walled with diameters of approximately 20 nm and the catalyst particles have diameters in the range of 5 to 25 nm. The results of HRTEM and energy dispersive X-ray spectroscopy (EDS) analysis confirm that the catalyst particles attached to the CNT are cubic zirconia. Most of the zirconia particles are located at one end of the CNTs, but particles embedded in the walls or inside the CNTs are also observed. Apart from the CNTs, graphitic layers covering zirconia nanoparticles are also widely observed. This work describes nano-zirconia acting as a catalyst for the growth of CNT during electrochemical conversion of CO2 and H2O in a Ni-YSZ cermet under strong cathodic polarization. An electrocatalytic mechanism is proposed for the CNT growth in SOECs. These findings provide further understanding not only on the mechanism of the catalytic growth of CNTs, but also on the local electrochemical properties of a highly polarized Ni–YSZ cathode at the micro and nano level.