The nucleation and electronic structure of vapor-deposited Au on hydroxylated MgO(001) surfaces has been investigated under ultrahigh vacuum conditions. Hydroxylated MgO(001) surfaces with two different hydroxyl coverages, 0.4 and I monolayer, respectively, were prepared by exposure to water (D2O) at room temperature. Scanning tunneling microscopy experiments show significantly higher gold particle densities and smaller particle sizes on the hydroxylated MgO surface as compared to gold deposited on clean MgO(001). Infrared spectroscopy and X-ray photoelectron spectroscopy experiments were performed to reveal details about the initial nucleation of gold. Gold atoms are found to chemically interact with a specific type of hydroxyl groups on the MgO surface, leading to the formation of oxidized gold particles. The enhanced adhesion of Au particles, which is due to the formation of strong Au-O interfacial bonds, is responsible for the observed higher stability of small Au clusters toward thermal sintering on hydroxylated MgO surfaces. The results are compared to similar studies on Au/TiO2(110) model systems and powder samples prepared by the deposition-precipitation route.