A pilot-scale fixed-bed membrane reactor, containing a catalyst in the shell and a membrane sealed in the centre to remove H-2 in situ, was used to improve the efficiency of methylcyclohexane dehydrogenation to toluene. A sulphided Pt/Al2O3 catalyst and a tubular palladium silver (Pd77Ag23) membrane with 0.1 mm wall thickness, both commercially available, were employed. Experiments with the membrane reactor in the temperature range 320-400 degrees C, a pressure of 15 bar, and liquid hourly space velocities (LHSVs) 0.5-2.6 h(-1) afforded toluene yields considerably greater than the equilibrium values at industrially relevant conditions. The optimum LHSVs, at which the interdependent toluene (TOL) yield and the reaction rate are optimized were 1.65, 1.05 and 0.97 h(-1) at 370, 340 and 320 degrees C, respectively. A kinetic rate equation for methylcyclohexane (MCH) dehydrogenation was derived directly from data obtained with the membrane reactor and used in the simulation of the reactor mathematical model. The latter predicted both the toluene yields and the H-2 permeation rates Very well.