In polymer-electrolyte fuel cells (PEFCs), ionomers play a key role not only as a proton exchange membrane (PEM) but also as nanometer-thick electrolyte “thin films” within porous catalyst layer (CL) structures, where they bind and cover the catalytic particles and provide transport pathways for the ions and reactant species. An ionomer’s properties and functionality are governed by its hydration-dependent nanostructure, which separates into hydrophilic transport pathways and hydrophobic polymer matrix. As the ionomer is confined to nanometer thicknesses in the CLs, its intrinsic nano-morphology and resulting transport properties deviate from bulk membrane behavior. These deviations in properties manifest themselves as additional resistance to transport of active species that are key for driving the desired electrochemical reactions. Thus, some of the performance losses observed in the cell are rooted in the catalyst ionomer and its local environment and interactions therein. In thin-film form, the ionomer forms dynamic interfaces with the air and substrate, which impose stronger impact on ionomer’s structure/functionality. This interplay between the confinement and dynamic interactions controls the catalyst ionomer’s properties, which affects the local transport resistances in CLs, and ultimately PEFC performance.