Electroless deposition of palladium thin-films on a surface of microporous ceramic substrate has been used to develop a new class of perm-selective inorganic membrane. In the last report, we presented a numerical method to analyze the stability in single-stage gas permeation. In this reporting period, we present our modeling work on dehydrogenation of cyclohexane in Pd-Ceramic membrane reactor. A model for studying dehydrogenation of cyclohexane in a membrane reactor is developed. Radial diffusion is considered to account for the concentration gradient in radial direction due permeation through the membrane. The model equations are derived for systems with reaction and without reaction. In the non-reaction case, a mixture of argon, benzene, cyclohexane, and hydrogen is used in the reaction side and argon is used as sweep gas in the separation side. Currently, we are working on the details of numerical solution of the model equations.