A two-phase flow, multi-component model has been optimized for a PEM (Proton Exchange Membrane) Fuel Cell. The modeling domain consists of the membrane, two catalyst layers, two diffusion layers, and two channels. Both liquid and gas phases are considered in the entire cathode and anode, including the channel, the diffusion layer and the catalyst layer. The Gravity effect on liquid water was considered in channels. Typical two-phase flow distributions in the cathode gas channel, gas diffuser and catalyst layer are presented. Source term and porosity term were optimized. Based on the simulation results, it is found that two-phase flow characteristics in the cathode depend on the current density, operating temperature, and cathode and anode humidification temperatures. Water mass fraction for the fuel cell with anode upward is higher than that the case with cathode-upward. Liquid water with the case of cathode-upward blocks pores in the gas diffuser layer leading to increasing the concentration polarization. Gravity of liquid water exerts the effect on the water mass fraction in the cathode.