Successful water management is critical to achieving high performance in proton exchange membrane fuel cells (PEMFCs). The relatively high sensitivity of terahertz radiation to liquid water is promising as a complementary alternative for flooding detection in PEMFCs. Using a novel, commercially available terahertz source and camera, this paper investigates the feasibility of a compact and low-cost terahertz imaging system for visualizing water build-up inside an operating PEMFC, supported by simultaneous high-resolution optical imaging. Several phenomena of water accumulation and transport, such as membrane hydration, main droplet appearance, water pool formation, growth, and eventual flush out by gases are imaged by terahertz imaging. These results agree with optical imaging and cell voltage readings. The proposed setup is also able to distinguish the effect of different air flow rates.