Direct oxidation of methane to methanol holds considerable potential for producing liquid fuel from natural gas. A vanadium and bismuth promoted MoO3/Cr2O3/SiO2 catalyst system prepared by coprecipitation was investigated at various temperatures and V and B promoter content. Then homogeneous gas phase oxidation reaction was also studied for comparison. It was found that HCHO and CO2 were the primary products during the non-catalytic homogeneous reaction with CH3OH produced when the reaction temperature increased. However, the primary products in the catalytic reaction were CH3OH and CO. These results suggest that the methane catalytic oxidation mechanism differ somewhat from the non-catalytic one. In-situ FTIR and TPD studies suggest that promoter V promote activation of the C-H bond of CH4 and that Bi be a good promoter to keep the desirable products from deep oxidation as well as enharce the bulk diffusion rate of lattice oxygen that may favor the methanol formation. Adjusting the content of the V and Bi oxides and the preparation conditions, it provided a best Bi-V-Mo-Cr-Ox/SiO2 catalyst system that achieved up to 80% CH3OH+ HCHO selectivity with about 13% CH4 conversion.