Passive water management techniques are provided in an air-breathing direct oxidation fuel cell system. A highly hydrophobic component with sub-micrometer wide pores is laminated to the catalyzed membrane electrolyte on the cathode side. This component blocks liquid water from traveling out of the cathode and instead causes the water to be driven through the polymer membrane electrolyte to the cell anode. The air-breathing direct oxidation fuel cell also includes a layer of cathode backing and additional cathode filter components on an exterior aspect of the cell cathode which lessen the water vapor escape rate from the cell cathode. The combination of the well laminated hydrophobic microporous layer, the thicker backing and the added filter layer, together defines a cathode structure of unique water management capacity, that enables to operate a DMFC with direct, controlled rate supply of neat (100%) methanol, without the need for any external supply or pumping of water. The cell anode is provided with a hydrophilic backing layer. When the water is driven through the polymer membrane electrolyte from the cell cathode to the cell anode chamber, it is available for the anodic reaction, and any excess water is carried out along CO.sub.2 ventilation channels to the outside environment.