MTBE is manufactured via the chemical reaction of methanol and isobutylene. Methanol is primarily derived from natural gas, where steam reforming converts the various light hydrocarbons in natural gas (primarily methane) into carbon monoxide and hydrogen. The resulting gases then further react in the presence of a catalyst to form methanol. Isobutylene can be produced through a variety of methods. n-butane can be isomerized  into isobutane which can be dehydrogenated to isobutylene. In the Halcon process, t-Butyl hydroperoxide derived from isobutane oxygenation is reacted with propylene to produce propylene oxide and t-butanol. The t-butanol can be dehydrated to isobutylene.
MTBE production in the U.S. peaked in 1999 at 260,000 barrels per day before dropping down to about 50,000 barrels per day and holding steady, mostly for the export market. After the purchase of SABIC, oil giant Saudi Aramco is now considered to be the world's largest producer with an estimated production capacity of 2.37 million metric tons per year (mt/yr). Worldwide production capacity of MTBE in 2018 was estimated to be 35 million metric tons.