A novel reactor design for the conversion of CO2 and H2 to methanol is developed. The conversion limitations because of thermodynamic equilibrium are bypassed via in situ condensation of a water/methanol mixture. Two temperatures zones inside the reactor ensure optimal catalyst activity (high temperature) and full conversion by condensation at a lower temperature in a separate zone. Due to this full gas conversion there is no need for an external recycle of reactants. Experimental work confirmed full carbon conversion (>99.5%) and high methanol selectivity (>99.5% on carbon basis). Additionally, it was shown that due the temperature gradient inside the reactor significant reaction rates are achieved under natural convection conditions.