Tubular reactors in which exothermic reactions take place sometimes are operated adiabatically and sometimes are cooled. Adiabatic operation makes reactor design easier because tube geometry can be selected simply on the basis of pressure drop considerations. Steady-state temperature profiles in adiabatic reactors increase monotonically. The design of cooled tubular reactors, however, involves complex tradeoffs between tube geometry, pressure drop, and heat-transfer area. Temperature profiles typically exhibit a peak at some axial position. This paper considers the impact of these interacting parameters on the optimum steady-state economic design of the entire plantwide process. The system studied has an exothermic, irreversible, gas-phase reaction A + B --> C occurring inside the tubes of a packed plug-flow tubular reactor. Steam is generated on the shell side to remove heat. The process consists of a reactor, feed-effluent heat exchanger, furnace, partial condenser, separator, and recycle compressor. Pressure drop through the reactor is important because of compression costs of the gas recycle and is reduced by using large-diameter tubes because of the smaller velocities. Heat removal is also important in cooled reactors and is improved by using small-diameter tubes because of their larger heat-transfer area-to-volume ratio. This paper presents a design methodology for considering all these complex tradeoffs. After specifying a reasonable tube length and fixing the maximum peak temperature, the two design degrees of freedom chosen are tube diameter and reactor pressure drop. The economic objective function is to minimize the total annual cost of the process: the annual capital cost of the reactor, catalyst, compressor, heat exchanger, and furnace; and the operating cost of the compressor and furnace. The method calculates the optimum tube diameter, reactor pressure drop, amount of catalyst, coolant temperature, number of tubes; and recycle now rate. Results show that optimum designs of systems with small specific reaction rates feature large reactors and large recycle flow rates, which dictate the use of larger tube diameters and smaller pressure drops over the reactor. As specific reaction rates increase, reactor size and recycle flows decrease, which leads to optimum designs with smaller tube diameters and larger reactor pressure drops.