Dimethyl ether (DME) is an innovative clean fuel that can be used in various ways in many different sectors including household, transportation, power generation, etc. In order to use DME as a fuel, it must be produced in a highly efficient manner. As part of fundamental research, a new efficient catalyst and slurry phase process for DME synthesis were developed. After testing was carried out at a pilot plant (5 tons/day), the demonstration plant (100 tons/day) project was implemented from 2002 to 2006. The conversion of DME in the slurry phase reactor is dominated by W/F (W: Charged catalyst weight, F: Gas flow rate in the reactor), regardless of reactor scale (1 kg/day – 100 tons/day). The gas hold up was measured by increasing the velocity of the gas up to 40 cm/s. Within this range, gas hold up increased smoothly without any sudden change of fluid phenomena or any negative effect on the chemical reaction. There is no clear dependence of the gas hold up on the reactor diameter. The mixing diffusion coefficient in the slurry phase and the heat transfer coefficient from slurry to heat exchanger tubes were determined. Based on these data, a process simulator has been developed that predicts that commercial scale production of 3,000 tons/day can be realized by a single reactor 7m in diameter and 50m high.