The dehydrogenation of methanol and ethanol and the subsequent permeation of hydrogen through Pd and Pd-70Ag30 membranes, respectively, have been studied. In order to keep a continuous hydrogen permeation rate, oxygen needs to be added to the alcohol supply. Without oxygen, the decomposition products will form a contaminating layer on the upstream membrane surface. The extraction of hydrogen from ethanol is six times more effective through a Pd-70Ag30 membrane than through a pure Pd membrane (at optimum conditions). For methanol, the hydrogen permeation is 30% larger through a Pd-70Ag30 membrane than through a membrane of pure Pd. The increased hydrogen permeation yield through Pd-70Ag30 compared to Pd can be attributed mainly to a lower upstream consumption of hydrogen due to water formation, but also to an increased conversion of the alcohol in the presence of oxygen.