Water management and carbon-dioxide contamination from ambient air remain key challenges for development and operation of high-performance hydroxide-exchange-membrane fuel cells (HEMFCs). In this work, a 2D computational model of an HEMFC cell, coupled with a 1D down-channel stepping algorithm, is used to explore water management and carbon-dioxide contamination issues along the channel. Variations in local current density along the channel due to changes in membrane hydration and a reduction in oxygen content of the cathode gas are quantified. Water transport from anode to cathode is critical for replenishing water consumed at the cathode, and the effects of varying flow rates and membrane transport properties on water management are explored. We then include carbon dioxide gas in the cathode and show that the formation of a pH gradient could explain the observed decrease in current density in HEMFCs exposed to CO2. Furthermore, the HEMFC acts as an electrochemical CO2 pump, causing an increasing concentration of CO2 gas in the anode stream that prevents self-purging of the membrane from carbonate to hydroxide form. These issues highlight the need for careful engineering of HEMFC systems and for advanced membrane development to enhance water transport and hydroxide selectivity. (C) The Author(s) 2019. Published by ECS.