The catalytic combustion characteristics of methane-air mixtures in small-scale systems were investigated at elevated temperatures, with particular emphasis on identifying the main factors that affect formation and removal of combustion-generated pollutants. Computational fluid dynamics simulations were performed using detailed chemical kinetic mechanisms, and more insights were offered into the phenomena occurring in the temperature range where homogeneous and heterogeneous reaction pathways are both important. Reaction engineering analysis was performed to provide an in-depth understanding of how to achieve low emissions of pollutants. Spatial distributions of the major species involved were presented to gain insight into the interplay between the two competing pathways involved. The results indicated that the distribution of oxidized products depends critically on the feed composition, dimension, temperature, and pressure. Small-scale catalytic systems enable low emissions of pollutants even in a high temperature environment, along with high combustion efficiency. The interplay between the two competing pathways via radicals is strong, and the heterogeneous pathway can significantly inhibit the homogeneous pathway. The inhibiting effect also accounts for the low emissions of nitrogen oxides. Almost all of the nitrogen oxides emitted by small-scale catalytic systems are nitric oxide. Catalytic combustion technology can be used to reduce the formation of undesired products, especially pollutant nitrogen oxide gases far below what can be achieved without catalysts. Recommendations for the design of small-scale catalytic systems are provided.