MISO is an in-orbit demonstration mission that focuses on improving the representation of the methane distribution throughout the upper troposphere and stratosphere, to complement and augment the nadir- and zenith-looking methane observing system for a better understanding of the methane budget. MISO also aims to raise to space mission readiness the concept of laser heterodyne spectro-radiometry (LHR) and associated miniaturization technologies, through demonstration of Doppler-limited atmospheric transmittance spectroscopy of methane from a nanosatellite platform suitable for future constellation deployment. The instrumental and engineering approach to MISO is briefly presented to demonstrate the technical feasibility of the mission. LHR operates using narrow spectral coverage (<1 cm⁻¹) focusing on a few carefully chosen individual ro-vibrational transitions. A line-by-line spectral channel selection methodology is developed and used to optimize spectral channel selection relevant to methane isotopologue sounding from co-registered thermal infrared and short-wave infrared LHR. One of the selected windows is then used to carry out a first performance analysis of methane retrievals based on measurement noise propagation. This preliminary analysis of a single observation demonstrates an ideal instrumental precision of <1% for altitudes in the range 8–20 km, <5% for 20–30 km and <10% up to 37 km on a single isotopologue profile, which leaves a significant reserve for real-world error budget degradation and bodes well for the mission feasibility. MISO could realistically demonstrate methane limb sounding at Doppler-limited spectral resolution, even from a cost-effective 6 dm³ nanosatellite.