Oxidation of CH4 with N2O into value added products like methanol, formaldehyde etc., was attempted in a nonthermal plasma reactor operated under ambient conditions. Typical results highlight the potential of plasma during the direct decomposition of N2O into N2 and nascent oxygen that converts CH4 into methanol, formaldehyde, carbon dioxide and carbon monoxide with desired methanol selectivity ∼28%. It was observed that the high CH4/N2O ratios favor the formation of methanol. © 2013 The Royal Society of Chemistry.