Counterflow diffusion flames of methanol hydrothermal combustion are investigated to improve the understanding of hydrothermal flames. It is indicated that the thermodynamic properties by the Peng-Robinson equation of state and the modified transport properties can reduce the flame temperature by about 500 K. The Takahashi correlation for mass diffusivity is found to be appropriate for hydrothermal combustion through comparison with the experimental data of Wellig et al. (J. Supercrit. Fluids, 2009, 49, 1). Compared to the Kolmogorov length scale in the experimental combustor, the thickness of the calculated counterflow flame is ten times larger, which means that the flame would be affected by the turbulence. The flame stable range is also reproduced well by the developed hydrothermal counterflow flame model. In the end, a Flamelet Generated Manifold (FGM) table is generated, promising to provide good closure of the non-equilibrium chemical source term in further turbulent flame simulations.