Energy conversion efficiency was studied in a direct methanol fuel cell (DMFC) with an air-breathing cathode using Nafion 117 as electrolyte membrane. The effect of operating conditions, such as methanol concentration, discharge voltage and temperature, on Faradic and energy conversion efficiencies was analyzed under constant voltage discharge with quantitative amount of fuel. Both of Faradic and energy conversion efficiencies decrease significantly with increasing methanol concentration and environmental temperature. The Faradic conversion efficiency can be as high as 94.8%, and the energy conversion efficiency can be as high as 23.9% if the environmental temperature is low enough (10°C) under constant voltage discharge at 0.6V with 3M methanol for a DMFC bi-cell. Although higher temperature and higher methanol concentration can achieve higher discharge power, it will result in considerable losses of Faradic and energy conversion efficiencies for using Nafion electrolyte membrane. Development of alternative highly conductive membranes with significantly lower methanol crossover is necessary to avoid loss of Faradic conversion efficiency with temperature and with fuel concentration.