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Abstract The following contribution explores many of the fundamental aspects of the direct methanol fuel cell (DMFC). In particular, the electrochemical and physical processes that occur in the unit cell and the techniques used to study these phenomena are discussed. This information leads to a clearer picture of the breakdown and relative importance of the various contributions to the overall efficiency loss in a DMFC. The short introduction provides a brief perspective on the historical development of the DMFC and compares the present day performance to the conventional hydrogen/air fuel cell. A discussion of some of the analytical tools used to study the DMFC and probe the various processes, particularly under automotive operating conditions, follows. Techniques such as a.c. impedance spectroscopy under operating load conditions and gas chromatography for measuring methanol and carbon dioxide crossover, will be discussed in detail. The unit cell processes that typically dominate the performance characteristics of a DMFC under automotive operating conditions include: kinetic limitations at the anode and to a lesser extent at the cathode, mass transport limitations at the cathode and methanol and water crossover through the membrane from the anode to the cathode. By quantifying the various cell processes occurring by considering the overall mass flow and material balance, a more complete quantitative picture of the performance limitations of the DMFC expressed in terms of the relative contributions of the efficiency losses can be formulated. The contributions of the anode and cathode to the total efficiency losses are roughly comparable, unlike hydrogen/air fuel cells. Finally, in conclusion, this contribution will summarize some of the key findings and provide an outlook to the future.