Esterification of terephthalic acid with methanol was carried out over Al-MCM-41 (Si/Al=25, 50, 75 and 100) molecular sieves in the vapour phase (with respect to methanol) at 200, 250, 300 and 350°C, and under autogenous pressure conditions at 200°C. The vapour phase reaction showed 90% conversion at 300°C over Al-MCM-41 (100) with 100% selectivity to dimethyl terephthalate (DMT). Under the autogenous pressure, the reaction yielded about 95% DMT over Al-MCM-41 (100). The catalytic role of Al-MCM-41 was established by comparing activity with Si-MCM-41. The effects of various reaction parameters such as temperature, terephthalic acid loading, methanol flow rate, and catalyst weight on conversion were studied and the results discussed.