The atmospheric-pressure microwave plasma torch (MPT) is employed to produce hydrogen by decomposition of ethanol. The ethanol aerosol is injected directly into the early afterglow of a nitrogen plasma and the products are analyzed with Fourier Transformation Infrared Spectrometer (FT-IR) and Gas Chromatography (GC). Meanwhile, Optical Emission Spectroscopy (OES) is used to diagnose the plasma. The influencing factors on the hydrogen production are investigated with respect to the location of ethanol injection, ethanol feed rate, ethanol microdroplet size, absorbed microwave powers, total flow rate of carrier gas, and argon-to-N2 mixture ratio, respectively. And it is found that the excited species and high temperature plays the important roles in ethanol decomposition. In addition, the effect of gas flow pattern in reaction chamber on hydrogen production is analyzed with the aid of computational fluid dynamics (CFD) and the mechanism of ethanol decomposition by MPT is discussed. The achievements of hydrogen production in our experiment were reached with production rate up to 1309 L/h, energy yield up to 468 L/kWh, and hydrogen yield up to 95%, respectively.