Polymer electrolyte fuel cell (PEFC) systems operating on carbonaceous fuels require water for fuel processing. Such systems can find wider applications if they do not require a supply of water in addition to the supply of fuel, that is, if they can be self-sustaining based on the water produced at the fuel cell stack. This paper considers a generic PEFC system and identifies the parameters that affect, and the extent of their contribution to, the net water balance in the system. These parameters include the steam-to-carbon and the oxygen-to-carbon ratios in the fuel processor, the electrochemical fuel and oxygen utilizations in the fuel cell stack, the ambient pressure and temperature, and the composition of the fuel used. The analysis shows that the amount of water lost from the system as water vapor in the exhaust is very sensitive to the system pressure and ambient temperature, while the amount of water produced in the system is a function of the composition of the fuel. Fuels with a high H/C (hydrogen to carbon atomic ratio) allow the system to be operated as a net water producer under a wider range of operating conditions.