Solid oxide fuel cells (SOFC) are the most advanced energy system with the highest thermal efficiency. Current trend of research is on less than 10 kW scale, which requires compact fuel processing systems. Even if internal reforming in the stack is also a possible option, it causes significant temperature gradients and thermal stress. As an alternative, a compact heat exchange reformer (CHER) with a plate-fin co-flow or counter-flow configuration is proposed. Such a system integrates the heat management and reforming in one compact unit. This paper focuses on simulation of transient characteristics of CHER during the initial phase of start-up of small SOFC systems. Steam reforming (SR) and water-gas shift (WGS) reactions are chosen as the most appropriate reforming model. CHER is modeled as two-dimensional array of finite control volumes, and they are modeled with transient energy equations and dynamic molar balance equations. In addition, both reaction enthalpy and convection heat transfer between the catalyst-coated fins and fuel-steam mixture channels are considered. Several parametric simulations are performed as methane steam as a primary fuel mixture as a function of different operating temperature, steam-to-carbon ratio at the inlet, pressure gradient across the CHER, channel length, and flow configuration (co-flow and counter-flow).