Proton exchange membrane fuel cell offers higher energy density than the existing battery technologies for high-energy applications, and it is a promising power source for various industries including aerospace vehicles. We have been developing and testing a non-external humidified fuel cell system for high-altitude balloons, which require simple, light, and easy-to-operate power systems. This system consists of three major subsystems—a fuel cell stack, a reactant supply subsystem, and an electrical control subsystem. Ground performance testing in a vacuum chamber simulating the high-altitude vacuum condition was performed before the flight. Then, a demonstration flight of the fuel cell system was launched using a large balloon for verifying its performance under practical high-altitude conditions. Cell voltage variations synchronized with oxygen pressure spikes were observed that were probably caused by condensed product water plugging the flow passages of the back pressure regulator. Flight results indicated that the fuel cell system operated better when water was expelled as vapor, rather than in the liquid form. In addition, a back pressure regulator should be installed to avoid the accumulation of water droplets for realizing a stable performance.