Natural fatty alcohols are one of the major oleochemicals and can be produced by catalytic hydrogenation of fatty acid methyl esters. In the commercial multiphase process, the hydrogen availability to the solid catalyst limits the reaction rate. By adding propane to the reaction mixture, we can utilize the unique properties of supercritical fluids, properties between those of gases and liquids. Using propane, a substantially homogeneous supercritical phase is created, whereby hydrogen has complete access to the solid catalyst. At high substrate concentrations, a rapid fall of the reaction rate was observed, and the benefits of the propane addition were completely lost. This fall depends on a split of the supercritical reaction mixture into two phases (a substrate-rich and a hydrogen-rich phase). If this phase split occurred using small catalyst particles (less than or equal to 32 mum), the pressure drop over the catalyst bed increased sharply because the formed liquid droplets blocked the void space in the porous catalyst bed. These two phenomena were used to deduce the product and substrate solubility in the reaction mixture. The product showed the most unfavorable solubility which increased with higher pressure. Under our process conditions (150 bar, 280 degreesC, and 11 mol % hydrogen), a single phase was observed up to 2 mol % (i.e., 15% by mass) product. Besides the minimum pressure in the catalyst bed, substrate transport limitation could be shown to be an important factor in process optimization. Therefore, egg-shell catalysts or fine catalyst particles (100-300 mum) should preferably be used in the continuous supercritical reactors.