A model was developed to study the strong coupling between hydrodynamics and chemical reaction that occurs in external-loop gas-lift reactors. The model predicts the liquid circulation rate, as well as the axial profiles of gas holdup, pressure, gas and liquid velocity, and reactant conversion in the riser. The study on the first-order, irreversible, isothermal reaction in the gas phase nA→B with a change in the number of moles on reaction shows that for n>1, the gas holdup decreases along the riser, the liquid circulation rate is lower than that in the absence of reaction, and liquid circulation decreases as n and k increase. The bubble radius at the sparger and the inlet gas composition can have important effects on reactor performance. Scale-up strategies that involve increasing the reactor length result in higher reactant conversion, but a lower ratio of liquid circulation rate to gas feed rate.