A synthesis gas stream having a H.sub.2 /CO ratio of less than 3/1 is split, with one stream being subjected to water gas shift essentially to completion, adjusted with a portion of the other stream to a carbon monoxide content of about 3-6% by volume, and reacted in an adiabatic methanation zone. The high hydrogen composition and high H.sub.2 /CO ratio of the stream passed to the adiabatic zone is effectively regulated in this manner, preventing carbon formation and catalyst sintering. The effluent from said adiabatic zone is mixed with the remaining portion of the other stream and passed to an isothermal methanation zone. Carbon dioxide can be removed from the product methane-rich gas or from the methanation feed gas. In preferred embodiment, high pressure superheated steam is simultaneously produced by utilization of the heat of reaction of the methanation operations, enhancing the overall efficiency of the synthesis gas production-methanation operation.