Hydrogen production by partial oxidation of methanol (POM) was investigated over Au-Ru/Fe2O3 catalyst, prepared by deposition-precipitation. The activity of Au-Ru/Fe2O3 catalyst was compared with bulk Fe2O3, Au/Fe2O3 and Ru/Fe2O3 catalysts. The reaction parameters, such as O-2/CH3OH molar ratio, calcination temperature and reaction temperature were optimized. The catalysts were characterized by ICP, XRD, TEM and TPR analyses. The catalytic activity towards hydrogen formation is found to be higher over the bimetallic Au-Ru/Fe2O3 catalyst compared to the monometallic Au/Fe2O3 and Ru/Fe2O3 catalysts. Bulk Fe2O3 showed negligible activity towards hydrogen formation. The enhanced activity and stability of the bimetallic Au-Ru/Fe2O3 catalyst has been explained in terms of strong metal-metal and metal-support interactions. The catalytic activity was found to depend on the partial pressure of oxygen, which also plays an important role in determining the product distribution. The catalytic behavior at various calcination temperatures suggests that chemical state of the support and particle size of Au and Ru plays an important role. The optimum calcination temperature for hydrogen selectivity is 673 K. The catalytic performance at various reaction temperatures, between 433 and 553 K shows that complete consumption of oxygen is observed at 493 K. Methanol conversion increases with rise in temperature and attains 100% at 523 K; hydrogen selectivity also increases with rise in temperature and reaches 92% at 553 K. The overall reactions involved are suggested as consecutive methanol combustion, partial oxidation, steam reforming and decomposition. CO produced by methanol decomposition is subsequently transformed into CO2 by the water gas shift and CO oxidation reactions. (c) 2007 Elsevier B.V. All fights reserved.