Highly dispersed titanium oxide catalysts have been prepared within zeolite cavities as well as in the zeolite framework and utilized as photocatalysts for the reduction of CO2 with H2O to produce CH4 and CH3OH at 328 K. In situ photoluminescence, ESR, diffuse reflectance absorption and XAFS investigations indicate that the titanium oxide species are highly dispersed within the zeolite cavities and framework and exist in tetrahedral coordination. The charge transfer excited state of the highly dispersed titanium oxide species play a significant role in the reduction of CO2 with H2O with a high selectivity for the formation of CH3OH, while the catalysts involving the aggregated octahedrally coordinated titanium oxide species show a high selectivity to produce CH4, being similar to reactions on the powdered TiO2 catalysts. Ti-mesoporous molecular sieves exhibit high photocatalytic reactivity for the formation of CH3OH, its reactivity being much higher than the powdered TiO2 catalysts. The addition of Pt onto the highly dispersed titanium oxide catalysts promotes the charge separation which leads to an increase in the formation of CH4 in place of CH3OH formation.