Conversion of CO2 into methanol by catalytic hydrogenation has been recognized as one of the most promising processes for stabilizing the atmospheric CO2 level, and furthermore the methanol produced could be used as fuel or basic chemical for satisfying the large demand world-wide. The present work investigates a two-stage catalyst bed concept for conversion of CO2 to methanol. A system with two catalyst beds instead of one single catalyst bed is developed for conversion of CO2 to methanol. in the first catalyst bed, the synthesis gas is partly converted to methanol in a conventional water-cooled reactor. This bed operates at higher than normal operating temperature and at high yield. in the second bed, the reaction heat is used to pre-heat the feed gas to the first bed. The continuously reduced temperature in this bed provides increasing thermodynamic equilibrium potential. in this bed, the reaction rate is much lower and, consequently, so is the amount of the reaction heat. This feature results in milder temperature profiles in the second bed because less heat is liberated compared to the first bed. In this way the catalysts are exposed to less extreme temperatures and, catalyst deactivation via sintering is circumvented. In this work, a one-dimensional dynamic plug flow dynamic is used to analyze and compare the performance of two-stage bed and conventional single bed reactors. The results of this work show that the two-stage catalyst bed system can be operated with higher conversion and longer catalyst life time. (C) 2007 Elsevier B.V. All rights reserved.