This paper presents the effect of palladium membrane on the conversion of methanol reformed to the hydrogen by steam. A supported palladium membrane, which was electrolessly plated on porous stainless steel tube, was incorporated into the reaction system to configurate the membrane reactor. The reaction was carried out over Cu/ZnO/A(2)O(3) catalysts at 350 degreesC. The stability of the catalyst was affected by the composition of Cu, Zn, and Al. The higher the content of Al, the better the stability of the catalyst. A double-jacketed membrane reactor was used to conduct both reforming and oxidation reactions simultaneously in separate compartments, The heat released from the oxidation compartment can be directly transferred into the reforming compartment to compensate the heat required from the external furnace, The measured heat supply was found to be strongly depending on the recovery yield of hydrogen. Therefore, a heat balance could be obtained at the recovery yield around 74%, which is consistent with the analysis of energy self-balance.