Microhannel process technology offer significant advantages as a highly effective route to process intensification. NASA applications where size, weight, and process efficiency are key performance metrics, are very suitable applications. In situ resource utilization (ISRU) technologies are one such example. For use in a lunar carbothermal reduction process system a catalytic microchannel CO methanation reactor was developed. Design characteristics and operating performance evaluation, for a multichannel reactor approximately 4.5” X 0.5” X 1.0” in size, is discussed. Temperature, throughput, and mode of operation are variables explored. Two modes of operation were investigated: 1) under adiabatic conditions and 2) utilizing counter-current air cooling. The latter scenario offered a differential temperature profile which helped to improve performance. Demonstration of this concept is provided. Maintaining the inlet reactor temperature at 430oC the methane effluent composition output increased from 66.2% to 79.9% by introducing counter-flow air cooling. This allowed the exiting reactor temperature to decrease by ~ 100oC. Operating under such temperature differential conditions offers exploitation of high kinetics at the hot front-end of the reactor while utilizing favorable thermodynamics at the cooler back-end. The highly efficient and compact nature of microchannel reactors make them uniquely suitable for such reaction engineering applications.