This paper considers the modeling and control of a tubular fixed bed reactor with recycle stream for dimethyl ether (DME) production. For simulation purposes, a pseudo homogeneous model has been developed. By reactor simulation under steady state condition, effects of parameters such as feed rate, pressure and shell temperature are investigated. Using the steady state model, an optimizer that maximizes the reactor yield has been developed. For cooling the reactor, a steam drum that uses heat of reactions to produce steam was coupled with the reactor. Through dynamic simulation, system open loop response was obtained and two control loops were considered for controlling the reactor temperature and steam drum level. An optimizer that takes into account the feed variations was incorporated into the control system to maximize the DME production rate