Coupling energy intensive endothermic reaction systems with suitable exothermic reactions improves the thermal efficiency of processes and reduces the size of the reactors. One type of reactor suitable for such a type of coupling is the heat exchanger reactor. In this work, a one-dimensional pseudo-homogeneous plug flow model is used to analyze and compare the performance of co-current and counter-current heat exchanger reactors. A parametric analysis is carried out to address the vital issues, such as the exit conversion of the endothermic reaction, the temperature peak (hot spot) of the exothermic reaction and the reactor volumetric productivity. The measures to reduce the hot spot by different catalyst profiling techniques are also addressed. Some features of the dynamic behavior exhibited by these reactors, which are important from design, operational and control point of view, are presented. (c) 2005 Elsevier Ltd. All rights reserved.