The foundation and implementation of a method for systematic reactor design is described. The reactor path is sectioned into stages where each stage is designed so as to optimize an overall objective. This is a further development of a previously proposed method for designing chemical reactors (Hillestad, 2004, 2005). Reactants pass through a series basic operations or functions to form the desired products. The basic operations are represented by design functions on the path volume. The design functions are fluid mixing (dispersion), distribution of extra feed points, distribution of heat transfer area and coolant temperature, catalyst dilution distribution and more. The conceptual reactor design problem is solved as an optimal control problem. A direct method is applied where both the design functions and the state variables are discretized. The realization of the optimization is a staged process string of multifunctional units. A kinetic model of the gas phase methanol synthesis is used as an example. By applying the method on the model, a staged reactor design with less heat transfer area and higher production is possible. (C) 2010 Elsevier Ltd. All rights reserved.