Identifying the descriptors for the synergistic catalytic activity of bifunctional oxide-zeolite catalysts constitutes a formidable challenge in realizing the potential of tandem hydrogenation of CO 2 to hydrocarbons (HC) for sustainable fuel production. Herein, we combined CH 3 OH synthesis from CO 2 and H 2 on In 2 O 3 and methanol-to-hydrocarbons (MTH) conversion on HZSM-5 and discerned the descriptors by leveraging the distance-dependent reactivity of bifunctional In 2 O 3 and HZSM-5 admixtures. We modulated the distance between redox sites of In 2 O 3 and acid sites of HZSM-5 from milliscale (∼10 mm) to microscale (∼300 μm) and observed a 3-fold increase in space-time yield of HC and CH 3 OH (7.5 × 10 −5 mol C g cat −1 min −1 and 2.5 × 10 −5 mol C g cat −1 min −1 , respectively), due to a 10-fold increased rate of CH 3 OH advection (1.43 and 0.143 s −1 at microscale and milliscale, respectively) from redox to acid sites. Intriguingly, despite the potential of a three-order-of-magnitude enhanced CH 3 OH transfer at a nanoscale distance (∼300 nm), the sole product formed was CH 4 . Our reactivity data combined with Raman, Fourier transform infrared (FTIR), and X-ray photoelectron spectroscopy (XPS) revealed the occurrence of solid-state-ion-exchange (SSIE) between acid sites and In δ+ ions, likely forming In 2 O moieties, inhibiting C−C coupling and promoting CH 4 formation through CH 3 OH hydrodeoxygenation (HDO). Density functional theory (DFT) calculations further revealed that CH 3 OH adsorption on the In 2 O moiety with preadsorbed and dissociated H 2 forming an H−In−OH−In moiety is the likely reaction mechanism, with the kinetically relevant step appearing to be the hydrogenation of the methyl species. Overall, our study revealed that efficient CH 3 OH transfer and prevention of ion exchange are the key descriptors in achieving catalytic synergy in bifunctional In 2 O 3 /HZSM-5 systems.