In this study, a functional La(0.80)Sr(0.20)MnO(3-delta) (LSM) Scandia-Stabilized-Zirconia (ScSZ)/NiO-ScSZ dual-layer hollow fibre has been developed using a single-step co-extrusion and co-sintering process, and has been employed as a dual-layer hollow fibre membrane reactor for partial oxidation of methane. Oxygen permeation rate between 0.49 and 1.82 ml/min and methane conversion between 53.55% and 98.78% have been achieved when operating temperature is elevated from 920 to 1060 degrees C, together with a significant reduction in coke-deposition. Oxygen permeation through the outer LSM ScSZ permeation layer (approximately 109.2 mu m in thickness) is found to be the controlling step to methane conversion at the operating temperature below 990 degrees C, above which the excessive oxygen permeation results in formation of CO(2) and H(2)O as by-products. The experimental results further suggest that the amount of NiO in the inner NiO ScSZ layer should be optimised based on the factors such as catalytic activity/stability, porosity and mechanical strength in addition to the sintering behaviour which has to be matched to the outer LSM ScSZ layer. Copyright (C) 2011, Hydrogen Energy Publications, LLC. Published by Elsevier Ltd. All rights reserved.