The Particle Finite Element Method (PFEM) is used to develop a model to study two-phase flow in fuel cell gas channels. First, the PFEM is used to develop the model of free and sessile droplets. The droplet model is then coupled to an Eulerian, fixed-grid, model for the airflow. The resulting coupled PFEM-Eulerian algorithm is used to study droplet oscillations in an air flow and droplet growth in a low-temperature fuel cell gas channel. Numerical results show good agreement with predicted frequencies of oscillation, contact angle, and deformation of injected droplets in gas channels. The PFEM-based approach provides a novel strategy to study droplet dynamics in fuel cells.