Proton exchange membrane (PEM) fuel cells have emerged as a viable technology for power generation and energy conversion. Fuel cell engines for transportation applications possess many attributes such as high fuel efficiency, low emission, quiet and low temperature operation, and modularity. This paper provides a tutorial overview of critical transport phenomena occurring in PEM fuel cells and their impacts on the cell performance. Both hydrogen and direct-methanol fuel cells are discussed. Coupled experimental and modeling efforts ongoing at Penn State Electrochemical Engine (EC-Engine) Lab are described. Recent progress in modeling the multi-dimensional fluid dynamics and multi-component species transport with electrochemical kinetics, understanding the two-phase transport in porous electrodes, and developing detailed validation experiments is reviewed. Areas where future theoretical and experimental research is needed are identified.