Both theoretical and experimental approaches have been used to study the inherent two-phase flow, transport mechanism and the performance for PEM fuel cells.A two-dimensional mathematical model with a complete set of governing equations for all the components of a PEM fuel cell is developed. The model couples the flow, species, potential and current density distributions in the cathode and anode fluid channels, gas diffusers, catalyst layers and membrane respectively. A two-phase flow model is used in the cathode, with a detailed pseudo-homogeneous model in the catalyst layer and coupled water fluxes among different components in the PEM fuel cell.The modeling results of typical hydrogen, oxygen, water concentration distribution in the anode, the cathode and the membrane are presented. The coupling of species concentration, current density, overpotential and potential is shown in the MEA direction, and the decrease of species concentration and local current density is shown in the flow direction. The two-phase flow characteristics in the cathode with varying operating conditions are studied.Both the experiment and the model are used to study two of the most critical PEM fuel cell operating issues, i.e., the water and heat management. The dependence of fuel and good agreements are reached.The study shows a coupled model is necessary to simulate the transport processes in the PEM fuel cell and a two-phase flow model is essential in the cathode side. The model provides a realistic transport simulation in the PEM fuel cell and may study the influences of many important geometric, physical and operation parameters; therefore, the model can be used to study the water and heat management scheme, as well as to improve the PEM fuel cell performance