Reverse electrodialysis (RED) can harness the Gibbs free energy of mixing when fresh river water flows into the sea for sustainable power generation. In this study, we carry out a thermodynamic and energy efficiency analysis of RED power generation, and assess the membrane power density. First, we present a reversible thermodynamic model for RED and verify that the theoretical maximum extractable work in a reversible RED process is identical to the Gibbs free energy of mixing. Work extraction in an irreversible process with maximized power density using a constant-resistance load is then examined to assess the energy conversion efficiency and power density. With equal volumes of seawater and river water, energy conversion efficiency of ∼33–44% can be obtained in RED, while the rest is lost through dissipation in the internal resistance of the ion-exchange membrane stack. We show that imperfections in the selectivity of typical ion exchange membranes (namely, co-ion transport, osmosis, and electro-osmosis) can detrimentally lower efficiency by up to 26%, with co-ion leakage being the dominant effect. Further inspection of the power density profile during RED revealed inherent ineffectiveness toward the end of the process. By judicious early discontinuation of the controlled mixing process, the overall power density performance can be considerably enhanced by up to 7-fold, without significant compromise to the energy efficiency. Additionally, membrane resistance was found to be an important factor in determining the power densities attainable. Lastly, the performance of an RED stack was examined for different membrane conductivities and intermembrane distances simulating high performance membranes and stack design. By thoughtful selection of the operating parameters, an efficiency of ∼37% and an overall gross power density of 3.5 W/m2 represent the maximum performance that can potentially be achieved in a seawater-river water RED system with low-resistance ion exchange membranes (0.5 Ω cm2) at very small spacing intervals (50 μm).