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Distributed hydrogen generation from liquid hydrocarbon fuels to supply portable fuel cells presents an attractive, high energy density alternative to current battery technology. Traditional unit operation reactor design for hydrogen generation becomes inadequate with decrease in scale because of the unique challenges of size and weight minimization. To address the challenge of reactor scale-down, the concept of multifunctional reactors has emerged, in which synergistic combination of different unit operations is explored to achieve improved performance. The direct droplet impingement reactor (DDIR) studied here is based on this approach in which the liquid feed is atomized using a regularly spaced array of droplet generators with unparalleled control over droplet characteristics, followed by vaporization and reaction directly on the catalyst surface. Considering each droplet generator in the array as a unit cell, a comprehensive, first-principles model of the DDIR has been developed by considering the intimately coupled processes of 1) droplet transport, heating, evaporation, and impingement on the catalyst surface, 2) liquid reagent film formation, capillary penetration, and vaporization within the catalyst layer, and 3) gas phase heat and mass transfer and catalytic reactions. Simulations are performed to investigate the effect of reactor operating parameters on performance. Experimental validation of the model is carried out by visualizing droplet impingement and liquid film accumulation while simultaneously monitoring reaction product composition over a range of operating conditions. Results suggest an optimal unit cell shape for reaction selectivity based on a balance between reagent back diffusion and catalyst bed thermal resistance. Further, achieving a target throughput is best accomplished by adding together a larger number unit cells with optimized geometry and lower throughput (per unit cell) to more effectively spread heat and avoid hotspots at the catalyst interface. At the same time, conditions must be satisfied for ensuring droplet impingement on the catalyst surface, which become more stringent as unit cell throughput is decreased.