In this paper, local thermodynamic efficiency of permeation of a membrane element is introduced and used as a tool to provide insights into the effects of various operating parameters on the performance of a membrane gas separation process. The local thermodynamic efficiency of permeation is a function of membrane selectivity and the pressure ratio across the membrane and is independent of the absolute values of permeabilities and the pressures on either side of the membrane. The local thermodynamic efficiency of permeation analysis provides an indication of the efficiency of separation at each location within a membrane separator. It not only identifies low-efficiency zones but for binary mixtures it also provides an estimate of the potential for efficiency improvement if the local pressure ratios across the membrane could be altered. It also gives an insight into the impact of a sweep stream on the efficiency of a membrane separator and provides guidance on how the pressure ratios should be adjusted to maintain overall high efficiency. This analysis sheds some light on the performance of continuous membrane columns; and it also shows why polymeric film membranes are less than adequate for the production of extremely high-purity products. It is expected to be a very useful tool for optimal design of membrane separation processes.