A Waterproof, breathable shoe according to the present invention comprises an upper assembly (8) with an upper portion (10) including a breathable outer material (11) and with a bottom portion (20), said upper assembly (8) comprising a waterproof, breathable functional layer arrangement (18; 13, 21) extending over said upper portion (10) and said bottom portion (20). The shoe further comprises a ventilating sole element having a structure or material allowing for air flow through it, said ventilating sole element being attached to said upper assembly (8), wherein at least one lateral passage (50) extends from said structure or material through a side wall (702) of said ventilating sole element, said lateral passage (50) allowing for communication of air between said structure or material of said ventilating sole element and an outside of said ventilating sole element.