Selective oxidation of ethane (SOE) to ethylene was studied in a dense tubular ceramic membrane reactor made of oxygen ion conducting fluorite structured Bi1.5Y0.3Sm0.2O3 (BYS) at temperatures 825-875 degreesC. A dead-end tube and shell configuration was used where ethane was fed inside the tube and air was fed into the shell side of the membrane reactor system. At 875 degreesC, per pass ethylene yield of 56% with ethylene selectivity of 80% was obtained in the membrane reactor. Under reaction conditions, the oxygen permeation flux through the dense membrane is over an order of magnitude higher than those under oxygen permeation conditions with He as the purge. Oxygen permeation mechanism switches from p- to n-type electronic conduction under SOE reaction conditions. The BYS membrane after 2 days of SOE experiments remained in good integrity with some impurity phases formed on the membrane exposed to ethane.