BACKGROUND Oxidative coupling of methane (OCM) to C2 hydrocarbons is strongly exothermic and requires careful management of the dissipated heat. Running OCM in microchannel reactors offers fast heat transfer rates that enable controlled distribution of reaction temperature and product composition. This study involves modeling and simulation of OCM in a heat exchange integrated microchannel reactor involving parallel reaction and cooling channels separated by solid walls. RESULTS Using separating wall with high thermal conductivity and thickness above 5 × 10‐4 m regulates temperature distribution along the reaction channel and improves C2 yield. Increasing the methane‐to‐oxygen ratio decreases the reaction temperature and conversion immediately. Coolant inlet temperature affects the trade‐off between methane conversion and selective production of ethane and ethylene. Exothermic heat release and C2 hydrocarbon loss by oxidation are pronounced at higher reactant mass flow rates, whereas C2 yield is improved at higher coolant mass flow rates that dampen the reaction temperature. CONCLUSION Effective heat transfer and improved temperature control can be obtained in the microchannel geometry. The results provide insight into the potential use of microreactors, novel units known to have robust heat transfer properties, in controlling the temperature of the OCM process, which is one of the key design targets affecting product selectivity. © 2014 Society of Chemical Industry