The effect of hydrophobic agent (PTFE) concentration in the microporous layer on the PEM fuel cell performance was investigated using mercury porosimetry, water permeation experiment, and electrochemical polarization technique. The mercury porosimetry and water permeation experiments indicated that PTFE increases the resistance of the water flow through the GDL due to a decrease of the MPL porosity and an increase of the volume fraction of hydrophobic pores. When air was used as an oxidant, a maximum fuel cell performance was obtained for a PTFE loading of 20 wt.%. The experimental polarization curves were quantitatively analyzed to determine the polarization resistances resulting from different physical and electrochemical processes in the PEM fuel cell. The polarization analysis indicated that the optimized PTFE content results in an effective water management (i.e., a balancing of water saturations in the catalyst layer and the gas diffusion layer), thereby improving the oxygen diffusion kinetics in the membrane-electrode assembly. Published by Elsevier B.V.