A pore network model has been applied to the cathode side of a fuel cell membrane electrode assembly to investigate the mechanisms leading to liquid water formation in the cell. This model includes mass diffusion, liquid water percolation, thermal and electrical conduction to model phase change which is highly dependent on the local morphology of the cathode side. An iterative algorithm was developed to simulate transport processes within the cathode side of PEMFC applying a pseudo-transient pore network model at constant voltage boundary condition. This algorithm represents a significant improvement over previous pore network models that only considered capillary invasion of water from the catalyst layer and provides useful insights into the mechanism of water transport in the electrodes, especially condensation and evaporation. The electrochemical performance of PEMFCs was simulated under different relative humidity conditions to study the effect of water phase change on the cell performance. This model highlights the ability of pore network models to resolve the discrete water clusters in the electrodes which is essential to the two-phase transport behavior especially the transport of water vapor to and from condensed water clusters.