Using ambient-pressure X-ray photoelectron spectroscopy and Auger electron spectroscopy to monitor the reduction of Cu2O in H2, we identify the formation of an intermediate, oxygen-deficient Cu2O phase and its progressive inward growth into the deeper region of the oxide. Complemented by atomistic modeling, we show that the oxygen-deficient Cu2O formation occurs via molecular H2 adsorption at the Cu2O surface, which results in the loss of lattice oxygen from the formation of H2O molecules that desorb spontaneously from the oxide surface. The resulting oxygen-deficient Cu2O is a stable intermediate that persists before the Cu2O is fully reduced to metallic Cu. The oxygen vacancy-induced charge of the coordinating Cu atoms results in a satellite feature in Cu LMM, which can be used as a fingerprint to identify nonstoichiometry in oxides and local charge transfer induced by the nonstoichiometry.