Water management in polymer electrolyte membrane (PEM) fuel cells is of importance due to its impact on the performance, durability and ultimately the cost of the cell. In the gas diffusion layer (GDL), liquid water has a direct effect on species and heat transport. The amount of liquid water in the GDL affects the relative permeability and capillary pressure, which govern the convective and diffusive transport of liquid water. Liquid water acts as a barrier to the diffusion of gases through the void region and facilitates in heat transfer. In this study, the full morphology model was used in order to investigate the effects of liquid water presence on the transport properties of the carbon paper GDL and examine the applicability of using various laws to estimate the transport properties in the presence of liquid water. The numerical results were compared against published experimental data. Further, the method of standard porosimetry was used to experimentally measure the effect of Teflon treatment on the capillary pressure of carbon paper. It was found that the addition of PTFE to the GDL results in the increase of capillary pressure; however, further increases to the PTFE loading did not result in additional changes to the capillary pressure. Copyright (C) 2011, Hydrogen Energy Publications, LLC. Published by Elsevier Ltd. All rights reserved.