Abstract: This work develops a tubular air-cathode microbial fuel cell (T-AC-MFC) by modifying the proton exchange membrane (PEM) using a combination of polyvinyl alcohol hydrogel (PVA-H) and light expanded clay aggregate (clay). The modified PEM was then incorporated into a cathode to form a membrane electrode assembly (MEA) to promote electricity generation. The electrochemical performance of PEMPVA-H-clay was the best among three types of tested PEMs. The proton conductivity of PEMPVA-H-clay was 2.87-fold that of PEMPVA-H, indicating that adding clay mineral is an important modification of the PEM. PEMPVA-H-clay exhibited a high proton conductivity of 3.786 × 10−5 M/d at a PVA/clay powder ratio and clay powder size of 10:1 and 150 μm, respectively. The current density that was generated by our MFC using PEMPVA-H-clay was 35 times those found in the literature. Fifty mg/L of toluene was completely degraded in T-AC-MFC that was continuously operated for six days, and a maximum closed-circuit voltage of 285.63 mV as well as a power density of 25.14 mW/m2 were obtained. Our T-AC-MFC exhibited the highest efficiency of removal of toluene (>99%) and a power density that was 1.16–9.67-fold those of other MFCs in the literature.