A dense Pd/CeO2/MPSS composite membrane having a thin Pd layer of 13 mu m deposited on a macro porous stainless steel (MPSS) tube was prepared using an improved electroless plating method with the commercial activating and plating solutions. The hydrogen permeation behavior of the as-prepared composite membrane under the H-2/H-2 gradient indicated that the hydrogen permeation process may be mainly controlled by the bulk diffusion through the Pd layer. The hydrogen permeability was almost equal to the theoretical value of the pure I'd membrane. In addition, the hydrogen permeation flux as high as 0.275 mol/(m(2) s) was obtained at 823 K under the pressure difference of 200 kPa. However, the operating conditions such as hydrogen feed flux, sweep gas flux, hydrogen pressure, and temperature had a great effect on the permeation flux and resistance when it was operated under the H-2/H-2 + N-2 (sweep gas) gradient. After permeation tests, the catalytic membrane reactor for steam reforming of methane was constructed, appearing a high methane conversion of 97% at 773 K. The membrane stability was proven by steady hydrogen permeation flux, complete hydrogen selectivity versus helium, and unchanged membrane surface morphology after long-term operation. (C) 2005 Elsevier B.V. All rights reserved.