Fluidized Bed Membrane Reactors (FBMR) offer significant advantages for steam reforming and the production of hydrogen. Potential advantages include higher yields by reducing thermodynamic equilibrium limitations, process intensification by combining three vessels into one, reduced temperatures of operation, countering the adverse effects of pressure, virtually eliminating catalyst diffusional limitations, high productivity per unit volume of reformer, and flexibility in using alternative feedstocks. Realization of the FBMR process for hydrogen production requires that a number of unusual challenges in reactor design be met. This paper discusses the technical challenges and outlines key factors which are being addressed in providing the membranes, reactor configuration and integrity, catalyst, energy integration and operating conditions needed to establish an economically viable FBMR process.