It is indispensable to remove CO at the level of less than 50ppm in H-2-rich feed gas for the proton exchange membrane (PEM) fuel cells. In this paper, catalyst with high activity and selectivity, and a microchannel reactor for CO preferential oxidation (PROX) have been developed. The results indicated that potassium on supported Rh metal catalysts had a promoting effect in the CO selective catalytic oxidation under H-2-rich stream, and microchannel reactor has an excellent ability to use in on-board hydrogen generation system. CO conversion keeps at high levels even at a very high GHSV as 500 000 h(-1), so, miniaturization of hydrogen generation system can be achieved by using the microchannel reactor. (C) 2004 Elsevier B.V. All rights reserved.