Technological improvements in direct methanol fuel cells (DMFCs) are fuelled by their exciting possibilities in portable, transportation and stationary applications. In this paper, a synopsis of the worldwide efforts resulting in inventions of a plethora of DMFC prototypes with low, medium and high power capacities by a number of Companies, Research Institutions and Universities is presented. The most promising short term application of DMFCs appears to involve the field of portable power sources. Recent advances in the miniaturization technology of DMFCs devices make these systems attractive to replace the current Li-ion batteries. In the field of electrotraction recent demonstration of DMFC stacks with specific power densities and efficiencies approaching those of the combined system methanol reformer-polymer electrolyte fuel cell (PEMFC) have stimulated further investigation on the development of materials with higher performance and lower cost. The most appropriate range of operation temperatures for applications in transportation appears to lie between 100 and 150 degreesC. These operating conditions may be sustained by using new high temperature electrolyte membranes or composite perfluorosulfonic membranes containing inorganic materials with water retention properties at high temperature. The most challenging problem for the development of DMFCs is the enhancement of methanol oxidation kinetics. At present, there are no practical alternatives to Pt-based catalysts. High noble metal loading on the electrodes and the use of perfluorosulfonic membranes significantly contribute to the cost of these devices. Critical areas include the design of appropriate membrane electrode assemblies for specific DMFC applications and the reduction of methanol cross-over. This latter aspect is strictly related to the use of membrane alternatives to Nation, but it may also be conveniently addressed by the development of methanol-tolerant oxygen reduction catalysts. (C) 2003 Elsevier B.V. All rights reserved.