In light of the distribution and storage issues associated with hydrogen, efficient on-board fuel processing will be a significant factor in the implementation of PEM fuel cells for automotive applications. Here, we apply basic chemical engineering principles to gain insight into the factors that limit performance in each component of a fuel processor. A system consisting of a plate reactor steam reformer, water-gas shift unit, and preferential oxidation reactor is used as a case study. It is found that for a steam reformer based on catalyst-coated foils, mass transfer from the bulk gas to the catalyst surface is the limiting process. The water-gas shift reactor is expected to be the largest component of the fuel processor and is limited by intrinsic catalyst activity, while a successful preferential oxidation unit depends on strict temperature control in order to minimize parasitic hydrogen oxidation. This stepwise approach of sequentially eliminating rate-limiting processes can be used to identify possible means of performance enhancement in a broad range of applications.