This work is devoted to applying electrolessly deposited Pd- and Pd-Ag/porous stainless steel composite membranes in methane steam reforming. The methane conversion is significantly enhanced by the partial removal of hydrogen from the reaction location as a result of diffusion through the Pd-based membranes. For example, at a total pressure of 136 kPa, a temperature of 500-degrees-C, a molar steam-to-methane ratio of 3, and in the presence of a commercial Ni/Al2O3 catalyst together with continuous pumping on the permeation side, a methane conversion twice as high as that in a non-membrane reactor was reached by using a Pd/SS membrane. These effects were examined under a variety of experimental conditions. A computer model of the membrane reactor was also developed to predict the effects of membrane separation on methane conversion.