The technology of proton exchange membrane fuel cells (PEMFCs) has now reached the test-phase, and engineering development and optimization are vital in order to achieve to the next step of the evolution, i.e. the realization of commercial units. This paper highlights the most important technological progresses in the areas of (i) water and thermal management, (ii) scale-up from single cells to cell stacks, (iii) bipolar plates and flow fields, and (iv) fuel processing. Modeling is another aspect of the technological development, since modeling studies have significantly contributed to the understanding of the physico-chemical phenomena occurring in a fuel cell, and also have provided a valuable tool for the optimization of structure, geometry and operating conditions of fuel cells and stacks. The ‘quantum jumps’ in this field are reviewed, starting from the studies at the electrode level up to the stack and system size, with particular emphasis on (i) the ‘cluster–network’ model of perfluorosulfonic membranes, and the percolative dependence of the membrane proton conductivity on its water content, (ii) the models of charge and mass transport coupled to electrochemical reaction in the electrodes, and (iii) the models of water transport trough the membrane, which have been usefully applied for the optimization of water management of PEMFCs. The evolution of PEMFC applications is discussed as well, starting from the NASA’s Gemini Space Flights to the latest developments of fuel cell vehicles, including the evolutions in the areas of portable power sources and residential and building applications.