Water management is a critical design issue for polymer electrolyte membrane (PEM) fuel cells, because the PEM must be maintained at the proper water content to remain ionically conducting without flooding the electrodes. Furthermore, portable PEM power systems should operate at water balance to minimize weight. This paper presents the basic design relationships that govern water balance in a PEM fuel cell. Specific calculations are presented based on data from hydrogen/air and direct methanol fuel cells currently under development for portable power systems. We will show how the water balance operating point depends on the cell operating parameters and show the sensitivity to off-design conditions.