The current study investigated the development and application of lithium (Li)-doped zinc oxide (ZnO)-impregnated polyvinyl alcohol (PVA) proton exchange membrane separator in a single chambered microbial fuel cell (MFC). Physiochemical analysis was performed via FT-IR, XRD, TEM, and AC impedance analysis to characterize thus synthesized Li-doped ZnO. PVA-ZnO-Li with 2.0% Li incorporation showed higher power generation in MFC. Using coulombic efficiency and current density, the impact of oxygen crossing on the membrane cathode assembly (MCA) area was evaluated. Different amounts of Li were incorporated into the membrane to optimize its electrochemical behavior and to increase proton conductivity while reducing biofouling. When acetate wastewater was treated in MFC using a PVA-ZnO-Li-based MCA, the maximum power density of 6.3 W/m³ was achieved. These observations strongly support our hypothesis that PVA-ZnO-Li can be an efficient and affordable separator for MFC.