This invention discloses an improved integrated two step process for conversion of methane to liquid hydrocarbons of gasoline range. The invention particularly comprises catalytic oxidative conversion of methane with free oxygen to ethylene and higher olefins containing gaseous product in the first step and catalytic conversion of the olefins from the product stream of the first step without separating them to liquid hydrocarbons of gasoline range in the second step, for the conversion of methane to liquid hydrocarbons. The process of the present invention could be used in the petroleum industry for the production of gasoline and liquid hydrocarbon fuels and aromatic hydrocarbons.