We report a compact on-site hydrogen generator, which produces 10 Nm(3)/h of 99.9995% or higher purity hydrogen from methanol water mixture. This system consists of a methanol steam reformer to get hydrogen rich reformed gas and a metal membrane purification module to recover high purity hydrogen from the reformed gas. It can be used either as the on-site hydrogen supplier for industries or as the fuel processor for fuel cells. The hydrogen recovery by the metal membrane is about 75%, and the remaining 25% of hydrogen is recycled and burned in the catalytic combustion zone to supply heat for the endothermic steam reforming reaction. The overall thermal efficiency of the system is calculated to be 82% based on high beating values of methanol feed and product hydrogen. (C) 2002 International Association for Hydrogen Energy. Published by Elsevier Science Ltd. All rights reserved.