Catalytic CO2 conversion to energy carriers and intermediates is of utmost importance to energy and environmental goals. However, the lack of fundamental understanding of the reaction mechanism renders designing a selective catalyst inefficient. Here we show the correlation between the kinetics of product formation and those of surface species conversion during CO2 reduction over Pd/Al2O3 catalysts. The operando transmission FTIR/SSITKA (Fourier transform infrared spectroscopy/steady-state isotopic transient kinetic analysis) experiments demonstrates that the rate-determining step for CO formation is the conversion of adsorbed formate, whereas that for CH4 formation is the hydrogenation of adsorbed carbonyl. The balance of the hydrogenation kinetics between adsorbed formates and carbonyls governs the selectivities to CH4 and CO. We apply this knowledge to the catalyst design and achieve high selectivities to desired products.Understanding the mechanism of CO2 reduction on a catalyst surface is essential for achieving the desired product selectivity. Here, the authors show an operando kinetic analysis of CO2 hydrogenation over a palladium catalyst in order to address the factors governing the selectivity of the process.