The CO₂ hydrogenation reaction to produce methanol holds great significance as it contributes to achieving a CO₂-neutral economy. Previous research identified isolated Cu⁺ species doping the oxide surface of a Cu-MgO-Al₂O₃ mixed oxide derived from a hydrotalcite precursor as the active site in CO₂ hydrogenation, stabilizing monodentate formate species as a crucial intermediate in methanol synthesis. In this work, we present a molecular-level understanding of how surface water and hydroxyl groups play a crucial role in facilitating spontaneous CO₂ activation at Cu⁺ sites and the formation of monodentate formate species. The computational evidence has been experimentally validated by comparing the catalytic performance of the Cu-MgO-Al₂O₃ catalyst with hydroxyl groups against its hydrophobic counterpart, where hydroxyl groups are blocked using an esterification method. Our work highlights the synergistic effect between doped Cu⁺ ions and adjacent hydroxyl groups, both of which serve as key parameters in regulating methanol production via CO₂ hydrogenation. By elucidating the specific roles of these components, we contribute to advancing the understanding of the underlying mechanisms and provide valuable insights for optimizing methanol synthesis processes.