A system of two plug-flow reactors equipped with an interstaged tubular palladium-silver (Pd-Ag) membrane for ex situ H-2 separation, was tested for n-heptane reforming on a commercial Pt/Al2O3 catalyst. This system afforded a 65% higher toluene yield at 400 degrees C and 17 bar than the same system without interstage membrane. Proper control of the permeate H-2 pressure inside the membrane unit seemed to be crucial for maintaining the permeability of the membrane. Low H-2 pressures resulted in a decrease of H-2 permeability.