Proton exchange membrane fuel cells (PEMFCs) have recently passed the test or demonstration phase and have partially reached the commercialization stage due to the impressive worldwide research effort. Despite the currently promising achievements and the plausible prospects of PEMFCs, there are many challenges remaining that need to be overcome before PEMFCs can successfully and economically substitute for the various traditional energy systems. With the many promising research efforts in overcoming these challenges, the most important tools for the commercialization of PEMFCs will be the technical data and information from a real PEMFC application test. For these reasons, this paper introduces and discusses the remaining challenges and some of the latest research on the application test of PEMFC to real systems such as transportation, residential power generation and portable computers. In addition, this paper describes and summarizes the relative prospects and the competitive force of PEMFCs in these fields. These prospects primarily depend on stable and economical high-purity hydrogen supplies, the scale of application, the existence of more efficient competitive power sources and the social viewpoints such as the health and environment benefits as well as infrastructural aspects associated with traditional power supply and demand. The review shows that PEMFC have the most promising applications to buses, recreation vehicles, and lightweight vehicles. Without doubt, the technology for a stable supply of high-purity hydrogen along with the corresponding infrastructure is essential for the success of PEMFC in various application fields.