A series of zeolite Y modified with La, Ce, Pr, Nd, Sin and Eu were prepared via ion-exchange, and characterized by XRD, FT-IR and NH3-TPD. It was found that these rare earth metals were encapsulated in the supercage of zeolite Y and resulted in its enhanced acidity. Among them, La-, Ce-, Pr- and Nd-modified zeolite Y exhibited higher activity and stability (than pure HY) for methanol dehydration to dimethyl ether (DME). For DME synthesis directly from CO hydrogenation using the dual Cu-Mn-Zn/modified-Y catalysts, it was found that Cu-Mn-Zn/La-Y and Cu-Mn-Zn/Ce-Y were more active than Cu-NIn-Zn/pure-HY. The conversion of CO on Cu-Mn_Zn/Ce-HY achieved 77.1% in an isothermal fixed bed reactor at 245 degrees C, 2.0 NIPa, H-2/CO = 3/2 and 1500 h(-1). (c) 2007 Elsevier Ltd. All rights reserved.