Abstract In this study, a stochastic model is used to reconstruct the uncompressed gas diffusion layer (GDL) microstructures. Subsequently, the finite element method (FEM) is conducted for assembly pressure simulation to generate the compressed GDL microstructures. The effects of assembly pressure on GDL deformation are investigated. It is found that assembly pressure causes non-uniform deformation of the GDL along the thickness direction. Finally, a volume of fluid (VOF) model is developed to investigate two-phase flow in the compressed GDL. The results show that when the capillary pressure is higher than 4 kPa, the water saturation decreases as the compression ratio increases. But when the capillary pressure is below 3 kPa, compression has little effect on water saturation. Based on the above findings, three regions namely weak deformation region (WDR), moderate deformation region (MDR), and strong deformation region (SDR) are defined. Impacts of compression on water saturation differ in these three regions. Moreover, compression increases the pressure of water breakthrough, but has minor effects on preferential pathways of water breakthrough. Quantitative correlations between water saturation and capillary pressure in the uncompressed and compressed GDL microstructures are also concluded.