Palladium can play an interesting role as a catalytic membrane, that is, a hydrogen separative and catalytically active wall. Utilizing this function, a palladium membrane reactor capable of working under an adiabatic condition was designed in this study for coupling two conjugated reactions. On one side of the membrane, dehydrogenation of cyclohexane as a model takes place in the catalyst-packed layer, and on the membrane surface of the other side hydrogen permeated reacts in-situ with oxygen. In the adiabatic membrane reactor, a heat compensation between the endothermic dehydrogenation and the exothermic oxidation is expected to be realized. As a result, it became obvious experimentally that the generated heat due to the oxidation refluxed to the dehydrogenation side, heated up the catalyst layer and therefore enhanced the dehydrogenation. A simple mathematical model derived for analyzing the reaction process could simulate the practical reactor performances well.