In this work, a novel cascading fluidized-bed hydrogen permselective membrane methanol reactor (CFB-MMR) concept has been proposed. In the first catalyst bed, the synthesis gas is partly converted to methanol in water-cooled reactor which is a fluidized-bed. In the second bed which is a membrane assisted fluidized-bed reactor, the reaction heat is used to preheat the feed gas to the first bed. This reactor configuration solves some observed drawbacks of new conventional dual-type methanol reactor even better than fluidized-bed membrane dual-type methanol reactor (FBMDMR). The two-phase theory in bubbling regime of fluidization is used to model and simulate the proposed reactor. The proposed model has been used to compare the performance of a CFBMMR with industrial dual-type methanol reactor (IDMR) and FBMDMR. This comparison shows that fluidizing catalyst bed in the water-cooled reactor caused a favourable temperature profile along the CFBMMR. Additionally, the simulation results represent 3.94% and 9.53% enhancement in the yield of methanol production in comparison with FBMDMR and IDMR respectively. (C) 2010 Elsevier B.V. All rights reserved.