A CuO-ZnO-Al2O3-ZrO2 + HZSM-5 physical mixture bifunctional catalyst with a high activity for dimethy ether (DME) synthesis was used for CO2 hydrogenation. Various factors that affect catalyst activity, including the reaction temperature, pressure, and space velocity, were investigated. CO2 conversion reached 0.309, and DME and methanol yields were 0.212 and 0.059 with a stoichiometric ratio of H-2 to CO2 of 3 at 523 K, 5 MPa, and a space velocity of 6000 mL/(g cat-h). Well-studied kinetic models for methanol synthesis and methanol dehydration, respectively, were used to fit the experimental data and the kinetic parameters in the rate equations for DME synthesis were obtained by regression. A simulated process for CO2 hydrogenation indicated that a higher DME yield can be obtained with CO recycle that will also give a CO-free product.