Proton exchange membrane fuel cells (PEMFCs) are efficient and zero emission energy conversion technology with promising application prospects towards carbon neutrality. The PEMFC's performance is largely affected by the poor water management, which is a substantial concern for long term durability. Herein, we overview the water management problems in PEMFCs, such as flooding and dehydration of membrane electrode assembly and analyze the causes and their impacts on the device performance. Major problems such as flooding impedes the gas transport and electrode reactions, while dehydration increases the membrane resistance and hinders proton transport. We have thoroughly overviewed several electrochemical and physicochemical diagnostic techniques for water management in PEMFCs. Additionally, material development and optimization approaches for the flow field structural design are explored in order to improve mass transport and wetting characteristics for optimized water management. Therefore, it is anticipated that this review will provide insights into the effective operation of PEMFCs as well as practical guidance for resolving water management issues in PEMFCs and associated technologies, like PEM water and CO₂ electrolyzers.