Methane activation catalyzed over Ag-exchanged ZSM-5 zeolites was investigated by using the density functional theory (DFT) with a cluster model. Two different pathways were taken into account in this work: the "alkyl'' and the "carbenium'' pathways. The activation barriers obtained are 34.09 and 66.63 kcal/mol for the "alkyl'' and the "carbenium'' pathway, respectively. The calculated results show that the activation barrier of the "alkyl'' pathway is smaller than that of "carbenium'' pathway. Consequently, the "alkyl'' pathway is the preferential reaction pathway. A new mechanism of methane conversion in the presence of ethene was proposed. In the catalytic cycle, the initial step of methane activation proceeds with the "alkyl'' pathway and the Ag+ cation acts as an acceptor of the methyl group, then ethene reacts with the Ag+CH3- group to form propene. In addition, it is found that the Ag+ cations play an important role in the methane activation, compared with the reaction of methane activation over H-ZSM-5. (C) 2008 Elsevier B.V. All rights reserved.