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A key discovery in the last two decades has been the realisation that gold, when prepared as supported nanoparticles, is exceptionally effective as an oxidation catalyst, particularly for the oxidation of carbon monoxide at sub-ambient temperature but also for a number of organic reactions of synthetic significance. To some extent this observation is counterintuitive since extended gold surfaces do not chemisorb oxygen, nor do they corrode. For some oxidation reactions, the catalytic activity is markedly enhanced by the addition of palladium. This paper is concerned with recent advances in understanding the mechanism of catalysis by gold–palladium alloy nanoparticles of one such organic reaction, the oxidation of alcohols to the corresponding carbonyl compounds by molecular oxygen. We report detailed reaction studies using a high activity catalyst prepared by sol-immobilisation on a titania support. Using solvent-free conditions, benzyl alcohol is oxidised primarily to benzaldehyde but small amounts of toluene are also formed. The origin of these products is explored using initial rate measurements, deuterium labelling and kinetic isotope effects, and by the study of substituent effects. The effect of changing the nature of the catalyst support is also briefly examined. On the basis of all the results, we consider that we have evidence for multiple reaction pathways in this heterogeneous system. We put forward general mechanisms for the overall processes and describe confirmatory experiments in support of these, and we suggest possible reaction intermediates involved in the heterogeneously catalysed reaction. [ABSTRACT FROM AUTHOR]