The dehydrogenation of propane to propylene has been studied in an isothermal high-temperature shell-and-tube membrane reactor containing a Pd-coated ${psi}$-Al2O3 membrane and a Pt/K/Sn/Al2O3 packed catalyst . A tubular Pd-coated ${psi}$-Al2O3 membrane was prepared by an electroless plating method. This membrane showed high hydrogen to nitrogen permselectivities (PH2N2 = 10-50) at 400 $^{circ}C$ and 500 $^{circ}C$ with various transmembrane pressure drops. The employment of a membrane reactor in the dehydrogenation reaction, which selectively separates hydrogen from the reaction mixture along the reaction path, can greatly increase the conversion and enable operation of the reactor at lower temperatures. High hydrogen permselectivity has been confirmed as a key factor in determining the reactor performance of conversion enhancement.