The optimal energy efficient operating conditions of a solid oxide fuel cell (SOFC) system needs to be studied by considering the whole closed circuit system rather than a standalone study of the cell efficiency. This study is performed in this paper with the aid of steady state models of the SOFC, the after-burner, and the heat exchanger. For the first time, a comprehensive steady state model of the SOFC is developed and validated. A recursive algorithm with two cascaded optimization loops is applied to maximize the SOFC system efficiency and also to obtain the corresponding cell operating conditions. The developed steady state model aids in the implementation of the optimization procedure. Controlling the SOFC system for maximum efficiency operation for variable loads requires complex control laws. However, it is found that an appropriately chosen constant fuel utilization (FU) operation closely approximates the maximum efficiency operation of the fuel cell in its operating range. This is validated through closed-loop dynamic simulations of a bond graph model of the complete SOFC system. Three different commonly used control strategies and their implications on the energy and exergy efficiencies of the system, as well as their transient load following capabilities, are investigated.