Recent experimental results show that performance of a proton exchange membrane (PEM) fuel cell is improved when small particles of permanent magnet are deposited in the catalyst layer on the cathode side. In this study, the mechanism of this phenomenon was clarified by using numerical simulation. Permanent magnet particles induce a Kelvin (magnetic) repulsive force against liquid water and an attractive force towards oxygen gas. To precisely study the behavior of oxygen and liquid water flows near the interface between the catalyst layer and gas diffuser, the simulation domain included the catalyst layer and gas diffuser. The simulation results revealed the following. The Kelvin repulsive force against liquid water mainly "manages" the liquid water flow and improves the performance of the fuel cell, especially in the current-limited region. In the presence of Kelvin forces, the liquid water saturation near the interface between the catalyst layer and gas diffuser decreases, thus making more pore space available for transport of oxygen gas. Furthermore, the water velocity moving from the interface increases in the upstream region. The gas velocity near the interface also increases, and thus more oxygen is supplied to the reaction sites. In summary, the Kelvin force promotes removal of liquid water from the catalyst layer, thus providing more oxygen to the catalyst and improving the performance of the fuel cell. (c) 2005 Elsevier Ltd. All rights reserved.