Layered perovskite cathode materials have received considerable attention for intermediate temperature solid oxide fuel cells (IT-SOFCs) because of their fast oxygen ion diffusion through pore channels and high catalytic activity toward the oxygen reduction reaction (ORR) at low temperatures. In this study, we have investigated the effects of Fe substitution for the Co site on electrical and electrochemical properties of a layered perovskite, GdBa0.5Sr0.5Co2−xFexO5+δ (x = 0, 0.5, and 1.0), as a cathode material for IT-SOFCs. Furthermore, electrochemical properties of GdBa0.5Sr0.5CoFeO5+δ–yGDC (y = 0, 20, 40, and 50 wt%) cathodes were evaluated to determine the optimized cell performance. At a given temperature, the electrical conductivity and the area-specific resistances (ASRs) of GdBa0.5Sr0.5Co2−x FexO5+δ decrease with Fe content. The lowest ASR of 0.067 Ω·cm2 was obtained at 873 K for the GdBa0.5Sr0.5CoFeO5+δ. The GdBa0.5Sr0.5CoFeO5 + δ composite with 40 wt% GDC was identified as an optimum cathode material, showing the highest maximum power density (1.31 W/cm2) at 873 K, and other samples also showed high power density over 1.00 W/cm2.