The heterogeneous catalytic transfer hydrogenation (CTH) of styrene and nitrobenzene over Pd-based catalyst using methanol as hydrogen donor was investigated in a fixed-bed reactor. With the increase of the molar ratio of water to methanol from 0 to 1, the conversions of styrene and nitrobenzene are increased from 26.3% and 7.1% to 100% and 31.9%, respectively, and the selectivity of aniline is increased from 22.0 to 94.5 mol%. The presence of water improves the hydrogen transfer from methanol to styrene or nitrobenzene through the quick reaction of water with formaldehyde, formed from the dehydrogenation of methanol, into formic acid, which is an excellent hydrogen donor for the CTH of unsaturated organics. In the presence of water, methanol is a better hydrogen donor than isopropanol, n-propanol and ethanol, because water cannot easily react with acetone, propionaldehyde, and acetaldehyde formed from isopropanol, n-propanol, and ethanol, respectively. Additionally, the hydrogen atom utilization of the methanol donor in the presence of water is higher than the other donors, hydrogen atom in a part of water can also be utilized for the reduction of unsaturated organics. (C) 2010 Elsevier B.V. All rights reserved.