The Au 25 (SR) 18 cluster can catalyze 100% selective hydrogenation of α,β-unsaturated ketones to unsaturated alcohols. However, the mechanism remains a mystery. Here we unravel the underlying mechanism by using first-principles density functional theory calculations with benzalacetone as a substrate. We find that the Au 25 (SR) 18 cluster cannot directly activate either H 2 or benzalacetone separately. Instead, starting with coadsorption of H 2 and benzalacetone on Au 25 (SR) 18 , H 2 heterolytically cleaves to the substrate and to a surface Au atom of the cluster, followed by the facile transfer of H from the Au atom to the partially hydrogenated substrate. In this mechanism, CO and CC hydrogenations have barriers of 0.99 and 1.12 eV, respectively, in agreement with the experimentally observed selectivity toward unsaturated alcohol. In addition, we show that the ethanol solvent can further stabilize the partially hydrogenated intermediate of CO hydrogenation via a hydrogen bond, leading to a smaller H 2 cleavage energy (0.90 eV). Hence, the heterolytic cleavage of H 2 on the Au 25 nanocluster favors the more polar CO bond of benzalacetone, leading to selective formation of unsaturated alcohol. This work reveals that the weak interaction between H 2 and the Au cluster, the formation of a Au hydride, and the polar solvent are responsible for the high selectivity of the α,β-unsaturated ketone hydrogenation to the corresponding unsaturated alcohol over the Au 25 nanocluster.