A flow through catalytic reactor (10) which selectively catalytically decomposes methanol into a soot-free hydrogen-rich product gas utilizing engine exhaust at temperatures of 200.degree. to 650.degree. C. to provide the heat for vaporizing and decomposing the methanol. The reactor (10) is combined with either a spark ignited (28) or compression ignited (54) internal combustion engine or a gas turbine (202) to provide a combustion engine system. The system may be fueled entirely by the hydrogen-rich gas produced in the methanol decomposition reactor or the system may be operated on mixed fuels for transient power gain and for cold start of the engine system. The reactor (10) includes a decomposition zone formed by a plurality of elongated cylinders (12) which contain a body (114) of vapor-permeable, methanol decomposition catalyst preferably a shift catalyst such as copper-zinc. A vaporizer (14) is provided for vaporizing liquid methanol prior to introduction into the elongated cylinders (12). Exhaust gas from the internal combustion engine is passed in contact with the elongated cylinders (12) to supply the heat needed for methanol decomposition. The partially cooled exhaust gases are then passed to the vaporizer (14) where residual heat in the exhaust is utilized in vaporization of liquid methanol.