The investigation of water management within proton exchange membrane fuel cells (PEMFCs) has led to the definition of a water transfer factor to describe the net transfer of water across the membrane. In most fuel cells, the total amount of water transferred across the membrane is a small fraction of the total water passing through the fuel cell, and therefore experimental measurements of the water transfer factor have been very difficult to achieve in practice. This paper presents a four-step systematic approach to design and validate a measurement concept that will enable the measurement of the water transfer factor with the desired accuracy. These steps are: (1) several key equations are obtained from mass balance; (2) potential measurands are screened by sensitivity analysis; (3) the performance of interesting measurement concepts is simulated by a Monte Carlo approach to account for the variability of the instrument performance and other operational considerations; and (4) validation tests are achieved in a simulated fuel cell configuration to determine measurement accuracy of the selected measurement concept. Four key equations were derived from mass balance considerations allowing for the determination of the water transfer factor. The sensitivity analysis showed that measurement concepts that relied on the differential mass flow rate and the differential water content would yield the best accuracy. However, these measurement concepts were found to involve a great risk associated with the development or adaptation of key measurement instruments. A more conventional measurement concept, which utilizes precision liquid injection by syringe pumps and water content measurement by infrared absorption, was therefore selected. The measurement concept was further improved by implementing a reference injection, which, based on the virtual experiments using Monte Carlo calculations, allowed for an order of magnitude improvement in the accuracy. From the validation tests it was determined that combining anode and cathode side measurements, the measurement concept has an accuracy better than on the water transfer factor.