Attempts have been made to simulate numerically the conductivity degradation of solid oxide fuel cell (SOFC) YSZ electrolyte; physicochemical model has been constructed on the basis of experimental conductivities of Pt/1%NiO-doped YSZ/Pt cells under OCV condition. The temperature effect was extracted from the time constant for degradation caused by one thermal activation process (namely Y-diffusion), whereas the oxygen potential effect was determined by those Raman peak ratios between the tetragonal and the cubic phases which linearly change in relation to the conductivity. The electrical properties of the YSZ electrolyte before and after the transformation are taken into account. The time constant is directly correlated with Y-diffusion with proper critical diffusion length (∼10 nm), while the Y-diffusion can be enhanced on the reduction of NiO; this gives rise to the oxygen potential dependence. The most important objective of simulating the conductivity degradation is to reproduce the oxygen potential profile shift on transformation. Detailed comparison between experimental and simulation results reveal that the shift of oxygen potential profile, therefore, the conductivity profile change inside the YSZ electrolyte can well account for the Raman spectra profile. This also reveals that with decreasing temperature, there appear other kinetic factors of weakening or diminishing enhancing effects by NiO reduction. This may be important in interpreting the ohmic losses in real stacks, because there are differences in time constant or in magnitude of degradation between the pellets and those industrial stacks in which transformation was confirmed by Raman spectroscopy.