Copper aluminate spinel (CuO.CuAl2O4) is the favoured Cr-free substitute for the copper chromite catalyst (CuO.CuCr2O4) in the industrial hydrogenation of aldehydes. New insights in the catalytic mechanism were obtained by systematically studying the structure and activity of these catalysts including effects of manganese as a catalyst component. The hydrogenation of butyraldehyde to butanol was studied as a model reaction and the active structure was characterised using X-ray diffraction, temperature programmed reduction, N2O chemisorption, EXAFS and XANES, including in-situ investigations. The active catalyst is a reduced spinel lattice that is stabilised by protons, with copper metal nanoparticles grown upon its surface. Incorporation of Mn into the spinel lattice has a profound effect on the spinel structure. Mn stabilises the spinel towards reduction of CuII to Cu0 by occupation of tetrahedral sites with Mn cations, but also causes decreased catalytic activity. Structural data, combined with the effect on catalysis, indicate a predominantly interface-based reaction mechanism, involving both the spinel and copper nanoparticle surface in protonation and reduction of the aldehyde. The electron reservoir of the metallic copper particles is regenerated by the dissociative adsorption and oxidation of H2 on the metal surface. The generated protons are stored in the spinel phase, acting as proton reservoir. Cu(I) species located within the spinel and identified by XANES are probably not involved in the catalytic cycle.