Pickering emulsion stabilized by solid nanoparticles provides a diverse solvent microenvironment and enables to promote the phase transfer of reaction substrates/products in catalytic reactions, but the intrinsic role of solvent is still not clear. Herein, using benzyl alcohol (BA) as a model reactant, we demonstrate the nature of the water-promoted activity for alcohol oxidation over the Pd/MgAl-LDO catalyst. Depending on the water in the solvent, we observe different reactivities regarding the proportion of the water in the system. Kinetic isotope effects confirm the participation and positive effects of water for oxidation of BA. The water promotion effects are recognized and identified by the water vapor pulse adsorption coupled with temperature program desorption. Moreover, the adsorption behavior of BA or benzaldehyde at the interface of water and Pd/MgAl-LDO is also investigated by quasi-in-situ Raman spectroscopy. In addition, the mechanism of water-promoted alcohol oxidation is rationally proposed based on the Langmuir-Hinshelwood mechanism. The general applicability of the water promotion effects is further demonstrated over different supports and substrates, which well achieves excellent catalytic activity and selectivity in Pickering emulsion compared to that in the pure toluene system.