This paper proposes a novel design concept for the enhancement of methane combustion in a microchannel that uses the combined effects of catalyst segmentation and cavities. The effects and combustion characteristics are evaluated using numerical simulation with detailed heterogeneous and homogeneous chemistries. The effects of a multi-segment catalyst and cavities on channel walls are examined and discussed in terms of various catalyst layouts, cavity dimensions, flow conditions, and reactor properties. In general, the chemical process of conventional catalytic combustion is a competition between hetero- and homogeneous reactions for fuel, oxygen, and radicals. The objective of using catalyst segmentation and cavities in a micro-reactor is to integrate the advantages of the hetero- and homogeneous reactions to enhance fuel conversion and to promote complete combustion in a confined distance. In this catalyst configuration, the pre-reaction of the heterogeneous reaction in an upstream catalyst segment can produce intermediate chemical radicals and catalytically induced exothermicity; the homogeneous reaction is subsequently induced and anchored in the cavity. Carbon monoxide is massively discharged after the homogeneous reaction due to incomplete combustion. The downstream catalyst segments strongly deplete carbon monoxide due to its high sticking coefficient on the platinum surface. Full methane conversion and complete combustion can thus be achieved in a short distance. Cavities can appreciably extend the stable operational range of the micro-reactor for a wide variety of inlet flows. Moreover, etching localized cavities in a small-scale system can further stabilize the flame, and cavities can serve as the heat source for reactions. These benefits of the proposed catalyst configuration can be applied in the design of a small-scale power/heating generator. Crown Copyright (c) 2010 Published by Elsevier B.V. All rights reserved.