Methane decomposition over a Ni/Cu/Al2O3 catalyst is studied in a two-stage fluidized bed reactor. Low temperature is adopted in the lower stage and high temperature in the upper stage. This allows the fluidized catalysts to decompose methane with high activity in the high temperature condition: then the carbon produced will diffuse effectively to form carbon nanotubes (CNTs) in both low and high temperature regions. Thus the catalytic cycle of carbon production and carbon diffusion in micro scale can be tailored by a macroscopic method, which permits the catalyst to have high activity and high thermal stability even at 1123 K for hydrogen production for long times. Such controlled temperature condition also provides an increased thermal driving force for the nucleation of CNTs and hence favors the graphitization of CNTs, characterized by high resolution transmission electron microscopy (HRTEM), Raman spectroscopy and XRD. Multistage operation with different temperatures in a fluidized bed reactor is an effective way to meet the both requirements of hydrogen production and preparation of CNTs with relatively perfect microstructures. (C) 2003 Elsevier B.V. All rights reserved.