Zeolite membranes are relatively new class of advanced materials where its characteristics have opened up the new opportunities of their application in separator, sensitive chemical sensors, and catalytic membrane reactor. The present review focuses on the development of functionalized zeolite membrane and subsequently its usage in the catalytic membrane reactor for combined separation and reaction of xylene isomers in a single unit. Synthesis of functionalized zeolite microporous crystal, development of functionalized zeolite membrane and xylene isomerization are presented and discussed. The models representing combined separation and reaction using functionalized zeolite membrane are also suggested. (C) 2007 Elsevier B.V. All rights reserved.