Metal supported solid oxide fuel and electrolysis cells (SOFC/SOEC) impregnated with nanosized catalysts are attractive as highly efficient low cost cells operating at relatively low temperature. Recent studies have focused on catalysts based on Ni and gadolinia-doped ceria (CGO) at the fuel side of the cell, and in some cases with the addition of Fe. Here we investigate FeNi/CGO catalyst in relation to SOFC/SOEC fuel electrodes with focus on the Fe diffusion into Ni/CGO during catalyst reduction. The reduction process was followed by in-situ XRD and in situ TEM, and the experiments show that for low metal loadings the CGO nanoparticle size is unaffected by the presence of metals. However, for a high Fe loading the oxide particle size increases and Fe is widely spread in the catalyst, both, in the form of NiFe alloy and by converting most of the CGO to CeFeO3 and GdFeO3.