A novel coupling route highlighting the combination of hydrogenation of acetophenone and dehydrogenation of 1,4-butanediol in vapor phase conditions over Cu-MgO catalyst is highly advantageous in terms of avoiding external pumping of H-2 and maintaining the formation of 1-phenylethanol and gamma-butyrolactone, the desired products, respectively, in good amounts at atmospheric pressure. Three Cu/MgO catalysts with 5, 10, and 15 wt.% Cu loadings are prepared by impregnation method and characterized by BET surface area, temperature programmed reduction, XRD, N2O pulse chemisorption, transmission electron microscopy (TEM) and X-ray photoelectron spectroscopy (XPS). Among the studied Cu/MgO catalysts, 10 wt.% Cu/MgO catalyst exhibited superior activity with nearly 100% selectivity of PhE and GBL The higher yields of the products are observed on the 10 wt.% Cu/MgO in single and combined reactions compared to the other two catalysts, it may be due to the higher dispersion, smaller Cu particle size and more number of Cu-0/Cu+ species at the surface. (C) 2012 Elsevier B.V. All rights reserved.