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Small nanoparticles of ceria deposited on a powder of CuO display a very high selectivity for the production of methanol via CO2 hydrogenation. CeO2/CuO catalysts with ceria loadings of 5%, 20%, and 50% were investigated. Among these, the system with 5% CeOx showed the best catalytic performance at temperatures between 200 and 350 °C. The evolution of this system under reaction conditions was studied using a combination of environmental transmission electron microscopy (E-TEM), in situ X-ray absorption spectroscopy (XAS), and time-resolved X-ray diffraction (TR-XRD). For 5% CeOx/Cu, the in situ studies pointed to a full conversion of CuO into metallic copper, with a complete transformation of Ce4+ into Ce3+. Images from E-TEM showed drastic changes in the morphology of the catalyst when it was exposed to H2, CO2, and CO2/H2 mixtures. Under a CO2/H2 feed, there was a redispersion of the ceria particles that was detected by E-TEM and in situ TR-XRD. These morphological changes were made possible by the inverse oxide/metal configuration and facilitate the binding and selective conversion of CO2 to methanol.