As syngas to dimethyl ether (DME) reaction is highly exothermic and the catalyst temperature window is very narrow, fluidized-bed reactor is an ideal candidate as it is highly effective both in heat and mass transfer. In this paper, a new mechanism and kinetics model for DME synthesis are established and a laboratory fluidized-bed reactor is set up. Experiments are carried out to assess the performance of DME synthesis in this reactor. The experimental results show that CO conversion and DME productivity are higher than those of fixed bed or slurry reactor. Two two-phase models are used to simulate DME synthesis in the lab fluidized-bed reactor with the bubble phase assumed to be in plug flow, and the dense phase in plug flow (P-P model) and in fully back-mixed flow (P-M model). Comparison between calculated and experimental results shows P-M is more valid than P-P model, and then influences of different parameters on reactor performance are investigated based on P-M model. (C) 2004 Elsevier Ltd. All rights reserved.