This paper addresses the problem of electrode flooding in the cathode catalyst layer (CCL) of a proton exchange membrane fuel cell (PEMFC) by optimizing the structure and composition of the CCL. By separating the catalyst ink preparation method into two steps, both Nafion, an ionic phase for proton conduction, and Teflon, a hydrophobic phase for gas transport, could be incorporated within the catalyst layer (CL) without Teflon blocking active catalyst sites. A study of 16 different compositions identified two regions in which fuel cells showed good performance, high reliability, and low sensitivity to small composition changes. The study resulted in the following understanding: A sufficient amount of Nafion was needed to create a continuous ionic phase, but excessive Nafion led to increased film thickness, thus poor oxygen diffusivity or even particle insulation. Also, an adequate amount of Teflon was needed to create a continuous hydrophobic phase for gas transport, while too much Teflon resulted in particle separation. The amount of Teflon was highly dependent on the Nafion content, which determined the void volume within the CL. Results showed that a two-step-prepared CL performed better than a conventional one-step-prepared CL, especially at lower air flow rates where flooding is more severe.