Partial oxidation of methanol (POM) to produce hydrogen was investigated over Au/Fe2O3 catalysts. The catalysts were prepared by inverse co-precipitation method. The influence of catalyst synthesis parameters such as precipitant, gold loading, calcination temperature and reaction parameter such as reaction temperature on POM reaction to produce hydrogen were investigated. The catalysts have been characterized by means of TGA, BET, XRD, TEM, SEM-EDS and XPS analyses. TGA and DTGA profiles clearly indicate that minimum decomposition temperature required to obtain Fe2O3 in Au/Fe2O3 catalysts is 660 K. SEM-EDS analysis confirms that Au and Fe in Au/Fe2O3 are homogeneously distributed over the agglomerate. A detailed microstuctural characterization of Au/Fe2O3 sample by XRD, TEM and XPS analyses has shown that nanometer sized gold particles with oxidized gold species is in predominant amount in the uncalcined catalysts sample. The mean particle size and metallic state of gold particles increase with increasing calcination temperature. A highly active Au/Fe2O3 catalyst is obtained by using Na2CO3 as precipitant with lower gold loading and calcination at 673 K. The catalytic behavior of the Au/Fe2O3 catalyst is related not only to the gold but also to the chemical state of the support. The effect of reaction temperature on the catalytic performance of the Au/Fe2O3 catalysts was studied in the temperature range of 423 to 523 K. Oxygen conversion was complete through out the examined temperature range. Methanol conversion increased with rise in temperature and attains 100% at 503 K; Hydrogen selectivity increased with rise in reaction temperature up to 523 K and then dropped off. The overall reactions involved are methanol combustion, partial oxidation, steam reforming and decomposition. CO produced by methanol decomposition and/or by reverse water gas shift is subsequently transformed into CO2 and H2 by the water gas shift and/or CO oxidation.