A heterogeneous, nonadiabatic, nonisothermal plug-flow reactor where ethylene epoxidation over silver catalyst occurs is studied theoretically. The catalyst distribution in the pellets is of a Dirac-delta type. The location of the Dirac distribution is optimized both for ethylene oxide Yield and selectivity maximization. Single-pellet results indicate that yield can be maximized either by surface or subsurface catalyst locations, depending on the operating conditions. However, for all practical purposes, selectivity is maximized only by surface catalysts. Significant improvements in reactor performance are found by using the appropriate Dirac catalyst, as compared to a uniform catalyst distribution. Further improvements can be achieved by using a two-zone reactor, with different catalyst location in each zone. Reactor runaway behavior can also be avoided by the use of Dirac catalysts.