An electrolyte system for direct methanol fuel cells (DMFC) was prepared by basing its design on combination of the existing concepts such as a composite membrane and a barrier against methanol cross-over. A composite membrane was prepared by impregnating Nafion ionomer into 6 mu m thick hydrophilic PETE (polyethylene-terephthalate) film whose average pore diameter was 0.3 mu m. Owing to some features of the film such as high mechanical strength and less than 30% of its surface being occupied by the openings for proton passage, it was far more effective to block the passage with a very thin palladium film with the aim of preventing methanol cross-over. The DMFCs utilizing such a thin composite membrane as the electrolyte exhibited improved performances over those using conventional Nation in the possibility of ambient temperature operation, higher current densities, and substantial reduction of methanol cross-over. (c) 2004 Elsevier Ltd. All rights reserved.