The cathode catalyst layer (CCL) is the major competitive ground for electrochemical reaction, reactant transport, and water and heat exchange in a polymer electrolyte fuel cell (PEFC). Nevertheless, it is often treated as a thin interface. Its pivotal role in the fuel cell water balance is unexplored. Here, the structural picture of CCLs forms the basis for a novel model that links spatial distributions of processes with water handling capabilities and current voltage performance. In the first step, the statistical theory of random composite media is used to relate composition, porous structure, wetting properties, and partial saturation to effective properties. In the second step, these effective properties are used in a macrohomogeneous model of CCL performance. A set of reasonable simplifications leads to a full analytical solution. Results demonstrate that the CCL acts like a watershed in the fuel cell, regulating the balance of opposite water fluxes toward membrane and cathode outlet. Due to a benign porous structure, the CCL represents the prime component for the conversion of liquid to vapor fluxes in PEFCs. Furthermore, the CCL is highlighted as a critical component in view of excessive flooding that could give rise to limiting current behavior. (c) 2006 The Electrochemical Society.