The invention discloses a method of converting carbon dioxide to methanol and/or dimethyl ether using any methane source or natural gas consisting of a combination of steam and dry reforming, in a specific ratio to produce a 2:1 molar ratio of hydrogen and carbon monoxide with subsequent conversion of the CO and H.sub.2 mixture exclusively to methanol and/or dimethyl ether. This method is termed the BI-REFORMING.TM. process. Dehydrating formed methanol allows producing dimethyl ether (DME) using any suitable catalytic method, including use of solid acid catalysts. When recycling formed water into the bi-reforming step the conversion of carbon dioxide with methane produces exclusively dimethyl ether without any by-product formation and complete utilization of hydrogen