A computational fluid dynamics multiphase model of a proton-exchange membrane (PEM) fuel cell is presented. The model accounts for three-dimensional transport processes including phase change and heat transfer, and includes the gas-diffusion layers (GDL) and gas flow channels for both anode and cathode, as well as a cooling channel. Transport of liquid water inside the gas-diffusion layers is modeled using viscous forces and capillary pressure terms. The physics of phase change is accounted for by prescribing local evaporation as a function of the undersaturation and liquid water concentration. Simulations have been performed for fully humidified gases entering the cell. The results show that different competing mechanisms lead to phase change at both anode and cathode sides of the fuel cell. The predicted amount of liquid water depends strongly on the prescribed material properties, particularly the hydraulic permeability of the GDL. Analysis of the simulations at a current density of show that both condensation and evaporation take place within the cathode GDL, whereas condensation prevails throughout the anode, except near the inlet. The three-dimensional distribution of the reactants and products is evident, particularly under the land areas. For the conditions investigated in this paper, the liquid water saturation does not exceed 10% at either anode or cathode side, and increases nonlinearly with current density.