In this simulation study, methanol steam reforming reaction to produce synthesis gas has been studied in a membrane reactor when shell side and lumen side streams are in co-current mode or in counter-current mode. The simulation results for both co-current and counter-current modes are presented in terms of methanol conversion and molar fraction versus temperature, pressure, H2O/CH3OH molar feed flow rate ratio and axial co-ordinate. Although the methanol conversion is sometimes higher in the membrane reactor operated in co-current mode than in the counter-current one, in the last case it is possible to extract more hydrogen from the reaction zone. With this theoretical analysis, we present a set of parameters which permit to have a CO-free hydrogen stream and a complete recovery of the hydrogen from the lumen side of the reactor. (c) 2006 International Association for Hydrogen Energy. Published by Elsevier Ltd. All rights reserved.