The Proton Exchange Membrane Water Electrolysis Market is on an upward trajectory, driven by advancements improving efficiency, cost-effectiveness, and lifespan of PEM electrolyzers. The sector is witnessing significant growth supported by the increasing global emphasis on clean hydrogen production to facilitate the energy transition. PEM electrolysis utilizes a solid polymer electrolyte to generate high-purity hydrogen from water through electricity, making it a pivotal technology for green hydrogen production powered by renewable energy sources. The industry projects a Compound Annual Growth Rate (CAGR) of approximately 37.45% between 2025 and 2032. The article elaborates on the key drivers contributing to the expansion of the PEM Water Electrolysis Market. These include the growing demand for green hydrogen across various sectors like transportation, refining, ammonia, and methanol, driven by the worldwide shift towards decarbonization and achieving net-zero goals. Additionally, supportive government policies and investments from numerous countries are fueling the development of electrolyzer infrastructure, reinforced by subsidies and clean energy mandates. Furthermore, there have been notable technological advancements in PEM systems, enhancing efficiency levels to around 80% and a further increase to an expected 82–86% efficiency by 2030, alongside benefits in current density operation and hydrogen purity. While the sector faces challenges such as high capital and material costs, electricity expenses, and infrastructure deficits, there are abundant opportunities for future growth. These opportunities include rapid market expansion, the adoption of large-scale electrolyzers for industrial applications, integrating PEM units with renewable energy sources, efforts towards membrane durability enhancement and cost reduction, and exploring new applications in heavy transportation, power-to-gas systems, and energy storage. The article underlines the significance of PEM electrolysis as a crucial technology for green hydrogen production, driven by the global momentum towards clean energy solutions and sustainability. Despite facing certain challenges, the market is poised for substantial growth, with a strong emphasis on innovation, efficiency, and cost-effectiveness to drive the adoption of PEM water electrolysis and accelerate the transition towards a cleaner energy landscape.