A novel multifunctional reactor concept has been developed for the production of ultrapure H-2 ( < 10 ppm CO) from light hydrocarbons such as CH4, for online use in downstream polymer electrolyte membrane fuel cells for small-scale applications (typically 1-50 kW). A high degree of process intensification is achieved by integrating permselective Pd metallic membranes for H-2 removal (500-600 degrees C operating temperature) inside a fluidized-bed reactor along with selective O-2 addition through dense perovskite membranes (900-1000 degrees C operating temperature). Incorporation of both types of membranes within a single reactor has the clear advantage of producing ultrapure H-2 and pure CO2, circumventing expensive CO2 sequestration. The membrane-assisted fluidized-bed reactor consists of a partial oxidation bottom section and a steam reforming/water gas shift top section. Using thermodynamic equilibrium calculations and more detailed fluidized-bed membrane reactor modeling, it is demonstrated that autothermal operation with high CH4 conversions and H-2 yields can be achieved with a relatively small catalyst inventory. Moreover, by tuning the feed ratios to the bottom and top sections, the temperatures in both sections can be effectively controlled for optimal membrane performance.