Nanocrystalline zirconia was synthesized and used as catalyst support for methanol synthesis. The nanocrystallite particles have new physical and textural properties which are critical in determining the catalytic performance. Nanocrystalline zirconia changes the electronic structure and affects the metal and support interactions on the catalyst. leading to facile reduction. intimate interaction between copper and zirconia, more corner defects and oxygen vacancies on the surface of the catalyst. All these changes are beneficial to the reaction of methanol synthesis from hydrogenation of CO2. As a result. higher conversion of CO2 and selectivity of methanol are achieved compared to the catalysts prepared by conventional co-precipitation method. (C) 2004 Elsevier B.V. All rights reserved.