Ammonia protonic ceramic fuel cells (PCFCs) have the potential to be a highly efficient power source with high energy density. However, the inadequate catalytic activity of the existing anodes for utilization of ammonia greatly limits the performance of PCFCs. Here we report an Fe-modified state-of-the-art Ni cermet anode with greatly enhanced activity and durability toward utilization of ammonia. Cells with an Fe-decorated Ni-BaZr0.1Ce0.7Y0.1Yb0.1O3 (Ni–BZCYYb) anode demonstrate an excellent performance, achieving peak power densities of 0.360, 0.723, 1.257, and 1.609 W cm−2 at 550, 600, 650, and 700 °C, respectively, which reveal the highest performance of solid oxide fuel cells fueled on ammonia. In addition, the cells show an excellent durability when operated at a constant current density of 0.5 A cm−2 (or a power density of ∼0.435 W cm−2) at 650 °C. The superior activity and durability of the Fe-modified Ni/BZCYYb anode are attributed to the alternation of NH3 adsorption strength and N2 desorption barrier heights, as confirmed by first-principles based mechanistic and microkinetic modeling. Our research provides a valuable guidance for the development of efficient electro-catalysts for ammonia PCFCs.