Water management problems of proton exchange membrane (PEM)-based H-2/O-2 and H-2/air fuel cell systems (PEM FC) are considered. It is demonstrated that PEM FC performance and efficiency are strongly influenced by water transport phenomena. A new water management scheme, based on anode side water removal, is suggested. It is shown that such a scheme may be very efficient if implementing cathode modified by oxygen permeable liquid perfluorocarbones. Possible efficiency of such a PEM FC is estimated using literature-based parameters of existing practical PEM FC. (c) 2006 Elsevier B.V. All rights reserved.