Direct conversion of methane to methanol with minimum energy consumption could become a key technology for highly efficient utilization of fossil fuel, because low-quality or low-temperature (similar to 100 degrees C) energy sources can be used and regenerated by converting methanol to hydrogen. For this purpose, a new technique for synthesizing methanol directly from a methane-oxygen mixture has been developed using a highly nonequilibrium, square-pulsed, silent discharge plasma at atmospheric pressure and temperature. Various effects of oxygen concentration, reaction time and discharge parameters on the conversion efficiency and reaction selectivity have been clarified. Reaction mechanisms for this type of plasma have been elucidated by using time-dependent optical emission measurements of CH radicals during the streamer current period just after a sharp, pulsed voltage rise. High values of 2.4 % and 32.6 % for methanol yield and selectivity, respectively, have been successfully obtained in a single-path experiment. These values may be enhanced by optimizing the reacting conditions, combining this technique with catalytic reactions, and introducing a recirculating reaction system. The formation processes for high-energy species just after the sharp, pulsed voltage rise were also analyzed theoretically. Good agreement was found between the experimental data and theoretical predictions.