The characteristics of a catalytic heat exchanger which integrates heat generation and heat exchange into one equipment have been investigated by the experiment and numerical simulation. The surface of the fin tubes was catalyzed by the formation of the oxide layer and the subsequent washcoating of ZrO2, followed by the impregnation of I'd catalyst. The experimental results showed that the performance of catalytic combustion in the catalytic heat exchanger was more significantly affected by the inlet velocity of the mixture than by its inlet temperature and equivalence ratio. It was also found that the catalytic surface area was a critical parameter to obtain the complete conversion of the mixture. Numerical simulation has been performed with a commercial software FLUENT. The calculated results indicated that the performance of the catalytic combustion was influenced by the catalytic fin configuration as well as the flow pattern of the mixture over the catalytic fins. The results recommend that the number and thickness of catalytic fins should be designed above 6 pieces/inch and less than 1.0 mm to achieve the best performance in the catalytic heat exchanger.