The synergistic interaction between small Cu particles and MgO/ZnO-supported catalysts, synthesized by the hydrothermal method, show a very high methanol production rate (0.0063 mol gCu−1 h−1). High Cu dispersion and large Cu surface area in the hydrothermal synthesized Cu/MgO/ZnO catalyst postulated to be the reason for high activity. The formation of defected ZnO crystals with Mg atoms provided a better adsorption site for CO2 (near Mg atom), whereas Cu-ZnO interface sites are responsible for the activation of CO2. 20 wt% loaded MgO catalyst showed preference to selective CO2 hydrogenation pathway producing clean methanol with > 99 % selectivity. In addition, Density Functional Theory (DFT) studies revealed that the basic nature of the MgO support can be the probable reason for the higher CO2 adsorption at the Cu-MgO interface compared to the Cu-ZnO interface. Cu13/MgO/ZnO (100) surface model is studied to understand the promoting effect of MgO on CO2 adsorption. © 2021 Elsevier B.V.