The surface and near-surface regions of an active catalyst and the adjacent gas-phase reactants were investigated simultaneously under reaction conditions using in situ X-ray photoelectron spectroscopy (XPS). This investigation of methanol oxidation on a copper catalyst showed that there was a linear correlation between the catalytic activity of the sample and the presence of a subsurface oxygen species that can only be observed in situ. The concentration profile of the subsurface oxygen species within the first few nanometers below the surface was determined using photon-energy-dependent depth-profiling. The chemical composition of the surface and the near-surface regions varied strongly with the oxygen-to-methanol ratio in the reactant stream. The experiments show that the pure metal is not an active catalyst for the methanol oxidation reaction, but that a certain amount of oxygen has to be present in the subsurface region to activate the catalytic reaction. Oxide formation was found to be detrimental to formaldehyde production. Our results demonstrate also that for an understanding of heterogeneous catalysts a characterization of the surface alone may not be sufficient, and that subsurface characterization is essential.