In the area of PEM fuel cells, water management remains one of the most challenging issues affecting PEMFC efficiency and lifetime. Liquid water active control and supervision techniques are limited by the absence of online sensors that can estimate the liquid water saturation. For this reason, this work presents the design of a state observer to estimate the cathode catalyst layer’s liquid water saturation of an open-cathode PEM fuel cell. The proposed observer is based on High-Gain techniques, and is modified with a dynamic dead-zone which reduces the observer’s noise sensibility. The results have been validated through numerical simulation and experiments. It is shown that, in the absence of noise, the proposed observer presents a similar performance than its non dead-zone equivalent. Moreover, in the presence of noise, the dead-zone significantly reduces the estimation error induced by it.