A multifunctional compact reactor was designed, built, and tested, using as a model reaction the selective oxidation of benzyl alcohol to benzaldehyde with molecular oxygen. The reactor contains static mixers, heat-transfer channels and mm-scale packed-bed reaction channels, i.e., integrating mixing, heat transfer and reaction functionalities. Integrated compact reactor technology should be particularly attractive to the fine chemistry and pharmaceutical industries. The reactor was shown to operate in the kinetic regime over a broad range of operating conditions due to intensified mass transfer. The reactor was also shown to operate isothermally despite high reaction rate, an appreciable heat effect and high reactant concentration (TOF = 300 h(-1), Delta H(r)degrees = - 183.7 kJ mol(-1)). Staged injection of oxygen along the length of the reactor was investigated as a method of increasing the selectivity of oxidation reactions. Staged injection was shown to be beneficial; however, this was likely to be due to the development of a more uniform hydrodynamic regime of two-phase flow along the packed reaction channel. Experiments were performed with the ruthenium(III) hydrated oxide catalyst supported on alumina (0.9 wt% Ru/Al2O3). High activity and selectivity were observed even when working with reactant concentrations approaching industrial conditions (1 mol L-1). (c) 2005 Elsevier B.V. All rights reserved.