A typical methanol loop reactor is analyzed in this study. All basic equipment in the Lurgi-type methanol loop is included in the proposed model. A detailed dynamic model described by a set of ordinary differential and algebraic equations is developed to predict the behavior of the overall process. The model is validated against plant data. A new deactivation model is proposed and its parameters are estimated using daily plant data. The interesting feature of this model is that it incorporates the effect of carbon dioxide and carbon monoxide on the catalyst deactivation. Using the model, the effect of various factors to compensate for the reduction of production rate due to catalyst deactivation has been examined. Some improvements can be achieved by adjusting the operating conditions. Finally, a strategy is proposed for prevention of reduced production due to catalyst deactivation.