Air-Breathing Proton Exchange Membrane Fuel Cells (AB-PEMFC) have the potential to supersede lithium-ion batteries in portable electronics. However, their water management issue has yet to be resolved to ensure optimum cell performance and safe system operation. In this paper, the formation of water droplets and their aggregation in the cathode flow channels of an operating AB-PEMFC is investigated by direct visualisation under various operating conditions. The developed optical set-up enables observation of droplet formation on the surface of the membrane from the top and side view of the channels simultaneously. The two orthogonal views reveal that during formation the receding and advancing droplet contact angles are almost identical with values that increase, in a similar trend to the droplet height, with increasing droplet diameter. Water films were able to develop and maintain direct contact with the side wall of the channels even under the effect of gravitational force. The aggregation of water droplets in the channels was strongly influenced by the change in the air and hydrogen stoichiometry conditions. However, these operating parameters appear to have no significant effect on the water extraction from the channels contrary to load and temperature, where temperature has proved to be the most effective water removal mechanism with minimum reduction in the current density of AB-PEMFC. (C) 2009 International Association for Hydrogen Energy. Published by Elsevier Ltd. All rights reserved.