A catalytic membrane contactor for selective hydrogenation of nitrate in water to nitrogen is discussed as a promising new approach to develop a technically feasible catalytic process for nitrate reduction from ground and surface water. Metal organic chemical vapour deposition (MOCVD) was used to place catalytically active metals, i.e., palladium and tin, inside the porous top-layer of asymmetric ceramic membranes (e.g. alumina) with different pore sizes and thicknesses of the top-layer. The influence of the membrane properties, i.e., the material, pore size and thickness of the catalytic layer, and the influence of the MOCVD process parameters on the deposition of the metals was studied and catalytic membranes with different palladium loading and palladium/tin ratio were prepared. These membranes were characterised with respect to the pore structure and the distribution of the active metals. Their catalytic performance in the hydrogenation of nitrate in water was investigated in a laboratory stirred tank membrane reactor under continuous flow conditions to explore the influence of important process parameters. The results show that the catalytic membranes offer a high activity and a fair selectivity to nitrogen which may be further improved by an optimisation of the preparation procedure.