Thermochemical cycle using water as raw material and nuclear/renewable energies as sources of energy is believed to be a safe, stable and sustainable route of hydrogen production. Amongst the well-studied thermochemical cycles, the sulfur-iodine (S-I) cycle is capable of achieving an energy efficiency of 50%, making it one of the most efficient cycles among all water-splitting processes. The SI cycle is characterized by three basic reactions as shown below.I 2 + SO 2 + 2H 2O → 2HI x + H 2SO 4 (120 °C)2H 2SO 4 → 2SO 2 + 2H 2O + O 2 (830 °C)2HI x → I 2 + H 2 (450 °C) The third section, that is the HI x (HI + I 2 + H 2O) processing section, is the most intricate step in terms of the process efficiency as it has got the lowest overall rate and very complicated separations. In order to overcome the low efficiency due to the poor equilibrium decomposition of HI, ongoing research is dedicated toward development of a hydrogen-permselective membrane reactor. Proper identification of suitable membranes and introduction of membrane reactor is proposed to improve the efficiency of the overall cycle and make hydrogen production more economical. The experimental procedure has already been optimized toward development of an asymmetric silica membrane. The authors presently intend to use the membrane in the form of a packed bed membrane reactor for the enhancement of equilibrium decomposition of HI. The present paper discusses the challenges and intricacies associated toward development of a membrane reactor which can be applied in highly corrosive environment like HI under a high temperature of about 500 °C. © 2011, Hydrogen Energy Publications, LLC. Published by Elsevier Ltd. All rights reserved.