In the solvent free oxidation of benzyl alcohol, using supported gold-palladium nanoalloys, toluene is often one of major by-products and it is formed by the disproportionation of benzyl alcohol. Gold-palladium catalysts on acidic supports promote both the disproportionation of benzyl alcohol and oxidative dehydrogenation to form benzaldehyde. Basic supports completely switch off disproportionation and the gold-palladium nanoparticles catalyse the oxidative dehydrogenation reaction exclusively. In an attempt to provide further details on the course of these reactions, we have utilized in situ ATR-IR, in situ DRIFT and inelastic neutron scattering spectroscopic methods, and in this article we present the results of these in situ spectroscopic studies.