Carbon Capture, Utilisation and Storage (CCUS) technologies are utilised to minimise net CO2 emissions and hence mitigate the impact of anthropogenic emissions on the global climate. One example of CO2 utilisation is the production of carbon-neutral methane fuel via catalytic CO2 reduction with H2 (methanation). Thermal activation of a metal impregnated metal-organic framework (MOF), 1 wt%Ru/UiO-66 in the presence of H2 and CO2 provides in situ synthesis of a highly active methanation catalyst: H2 promotes the formation of Ru0 nanoparticles, and CO2 behaves as a mild oxidant to remove framework carbon and promote ZrO2 crystallisation. The nature of the active MOF-derived Ru0/ZrO2 catalyst was studied by PXRD, TEM, and XAS, and the evolution of the parent 1 wt%Ru/UiO-66 during thermal activation monitored in operando by synchrotron PXRD. The Ru impregnated Zr-based MOF collapses on heating in H2 and CO2 to form an amorphous C and Zr containing phase that subsequently crystallises as tetragonal (t-) ZrO2 nanoparticles. These t-ZrO2 nanoparticles undergo a subsequent phase transition to the more stable monoclinic (m-) ZrO2 polymorph. In situ activation of Ru/UiO-66 generates a highly active catalyst for CO2 methanation by transforming the MOF precursor into a (carbonfree) crystalline t-ZrO2 support that stabilises highly dispersed metallic Ru nanoparticles. This insight may guide the rational design of future MOF-derived catalysts.