A water-cooled fixed bed Fischer-Tropsch reactor packed with Fe-HZSM5 catalyst has been modeled in two dimensions (radial and axial) using the intrinsic reaction rates previously developed at RIPI. The reactor is used for production of high-octane gasoline from synthesis gas. The Fischer-Tropsch synthesis reactor was a shell and tube type with high pressure boiling water circulating on the shell side. By the use of a two-dimensional model, the effects of some important operating parameters such as cooling temperature, H-2/CO ratio in syngas and reactor tube diameter on the performance capability of the reactor were investigated. Based on these results, the optimum operating conditions and the tube specification were determined. The model has been used to estimate the optimum operating conditions for the pilot plant to be operated in RIPI.