The present work demonstrates an innovative concept of obtaining enhanced performance via laser treatment of the cathode-side diffusion medium (DM) while mitigating identified degradation modes. A diffusion medium was modified such that hydrophilic heat affected zones (HAZ) were introduced, which led to localized water redistribution. However, no perforation was created, thus mitigating accelerated degradation of the catalyst layer and diffusion medium. This material was compared to a diffusion medium with 100-μm diameter perforations that contained heat affected zones surrounding the perforations. In-situ net water drag experiments indicate that at low humidity and low-to-moderate current densities, a non-perforated microporous layer (MPL) forces more water to back diffuse from the cathode to the anode. However, when more water is produced at higher currents or the inlet streams are close to saturation, the non-perforated MPL acts as a barrier to prevent liquid water in the cathode DM from moving toward the anode. Furthermore, a computational model showed that the thermal gradients introduced as a result of the perforations can significantly change the water transport, particularly due to phase-change induced flow. This work adds understanding to the role of the MPL and the laser-induced heat affected zones in polymer electrolyte fuel cell performance.