Gas-to-liquids (GTL) as an alternative to diesel is considered to be one of the technical options to reduce petroleum consumption in the on-road transportation sector. Between May and August 2007, a joint demonstration program by Tsinghua University, Beijing Transit, Cummins Corporation and Shell Corporation was carried out in Beijing. The program focused on the supply systems and vehicle use of GTL fuel. The demonstration fleet was formed by four transit buses fueled with GTL and four with diesel. It was demonstrated that GTL has good compatibility with diesel in terms of fuel supply system and vehicle use. This paper compares the energy consumption and GHG emissions of diesel and GTL fuel supply chains by life cycle analysis based on demonstration results. The results indicate GTL's large range (reported 54-70%) in synthesis efficiency, as the key factor in determining energy consumption and GHG emissions within the GTL fuel supply chain. For the probable case (GTL synthesis efficiency: 65%), the life cycle energy consumption and GHG emissions of GTL fuel are 42.5% and 12.6% higher than that of diesel. For two sensitivity analysis cases (GTL synthesis efficiency: 54% and 70%), energy consumptions are 74.2% and 31.2% higher and GHG emissions are 27.3% and 7.4% higher than that of the diesel fuel supply chain. If the efficiency of the GTL synthesis process is improved to 75%, then the GHG emissions level of the GTL fuel supply chain can be reduced to the same level as the diesel fuel supply chain. (C) 2010 Elsevier Ltd. All rights reserved.