Methane is an efficient absorber of infrared radiation and a potent greenhouse gas with a warming potential 72 times greater than carbon dioxide on a per molecule basis. Development of methane active remote sensing capability using the differential absorption lidar (DIAL) technique enables scientific assessments of the gas emission and impacts on the climate. A performance evaluation of a pulsed DIAL system for monitoring atmospheric methane is presented. This system leverages a robust injection-seeded pulsed Nd:YAG pumped Optical Parametric Oscillator (OPO) laser technology operating in the 1.645 µm spectral band. The system also leverages an efficient low noise, commercially available, InGaAs avalanche photo-detector (APD). Lidar signals and error budget are analyzed for system operation on ground in the range-resolved DIAL mode and from airborne platforms in the integrated path DIAL (IPDA) mode. Results indicate system capability of measuring methane concentration profiles with <1.0% total error up to 4.5 km range with 5 minute averaging from ground. For airborne IPDA, the total error in the column dry mixing ratio is less than 0.3% with 0.1 sec average using ground returns. This system has a unique capability of combining signals from the atmospheric scattering from layers above the surface with ground return signals, which provides methane column measurement between the atmospheric scattering layer and the ground directly. In such case 0.5% and 1.2% total errors are achieved with 10 sec average from airborne platforms at 8 km and 15.24 km altitudes, respectively. Due to the pulsed nature of the transmitter, the system is relatively insensitive to aerosol and cloud interferences. Such DIAL system would be ideal for investigating high latitude methane releases over polar ice sheets, permafrost regions, wetlands, and over ocean during day and night. This system would have commercial potential for fossil fuel leaks detection and industrial monitoring applications.