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The increasing emissions of carbon dioxide (CO2) and volatile hydrocarbons via burning of fossil fuels result in a significant amount of global warming and air pollution. With the concern over the impact of fossil fuel to the environment, the interest in alternative fuel production from the CO2 generated through utilization of new technologies has risen rapidly. Several clean alternative fuels, including dimethyl ether (DME) have been investigated for a more sustainable and greener environment. DME has a high cetane number but produces much lower NOx emission upon combustion. DME is typically synthesized using syngas based on conventional indirect DME route, where the process begins with conversion of syngas into methanol and subsequently dehydrated to DME in separate units. Recently, a direct single-step route to produce DME through dehydrogenation of CO2 and dehydration of methanol by utilising a novel bifunctional catalyst has been investigated. In direct DME, the dehydrogenation and dehydration occur simultaneously in a single reactor, which eliminate the need for a methanol production plant. However, the use of conventional fixed-bed reactor (FBR) for the direct DME synthesis causes many challenges including catalyst deactivation, where water appears in the reaction area, limiting the conversion of CO2 reactants into DME and consequently, the DME yield. It is also essential to manage the exothermic heat generated from the catalyst for better DME yield. In order to overcome these hurdles, several types of reactors have been proposed such as fluidized bed reactor, slurry reactor, microreactor and catalytic membrane reactor. In this paper, different types of reactors are first discussed and its applications related to the direct DME production from CO2 are highlighted. Finally, the challenges and difficulties of reactor development are addressed and future direction is outlined.