The continuously increasing demand for clean and renewable energy warrants the development of renewable, nonpolluting energy resources. Hydrogen is emerging as a natural choice as a more secure and cleaner energy carrier. Fuel cells can be used to produce clean energy from hydrogen, particularly for portable applications. Hydrogen can be produced from a variety of fossil fuel sources, but to decrease the dependence on fossil fuels, hydrogen has to be produced from a renewable source. Hydrogen production from steam reforming of ethanol (a renewable fuel) has emerged as a promising alternative in recent years. For conducting this reaction on board a vehicle, a compact reactor system is required. A microchannel reactor is more efficient and attractive for this purpose, because of the high surface to volume ratio, resulting in high heat and mass transfer rates.The reactions involved in producing CO-free hydrogen from ethanol include steam reforming of ethanol, water-gas shift reaction, and preferential oxidation of carbon monoxide. This chapter discusses the steps involved in the development of a microfuel processor for producing hydrogen from ethanol that include fabrication of the microchannels on the metal substrate, coating of the catalyst and support on the microchannels, assembly of the microchannel reactor, optimization of the catalysts for the three reactions, and, finally, heat integration of the different processes to maximize the efficiency of the fuel processor.