We report results of systematic, holistic, diagnostic, and cell studies to elucidate the mechanistic role of the experimentally determined influence of the anode gas-diffusion layer (GDL) on the performance of ultra-thin electrode polymer-electrolyte fuel cells, which can further enable fuel-cell market penetration. Measurements of product water balance and in situ neutron imaging of operational membrane-electrode-assembly water profiles demonstrate how improved performance is due to a novel anode GDL fiber-density modulated structure at the micrometer scale that removes water preferentially out of the anode, a key strategy to manage water in these cells. The banded structure results in low transport-resistance pathways, which affect water-droplet removal from the GDL surface. This interfacial effect is unexpectedly shown to be critical for decreasing overall water holdup throughout the cell. These studies demonstrate a new material paradigm for understanding and controlling fuel-cell water management and related high-power technologies or electrodes where multiphase flow occurs. Very thin electrodes enable high power density in electrochemical technologies, yet their thinness engenders issues related to buildup of products (e.g., water in polymer-electrolyte fuel cells [PEFCs]). The article explores an unexpected materials solution to the problem, which highlights the need to study such complicated systems in a holistic manner of a complete cell due to the nonlinearities existent in the highly coupled physical phenomena. The improved performance is due to an inherent unintentional manufacturing heterogeneity in the cell backing layer, which mainly affects its surface properties. With this knowledge, one can now engineer and optimize these critical heterogeneities for different architectures. The findings are relevant to those working on materials for electrochemical energy conversion and represent new key knowledge that can have significant impact in PEFCs and related electrochemical cells, especially where multiphase flow occurs. High-power electrodes in electrochemical technologies (e.g., fuel cells) typically require ultra-thin catalyst layers, which, especially when multiphase flow exists, exhibit mass-transport limitations. These have been mitigated through new backing layer structures and nontraditional removal of water out of the anode side of the cell for a new design and operation paradigm.