The activity of a V-MCM-41 catalyst with a V/Si molar ratio of 0.04 was compared with the activity of a pure MCM-41 catalyst and some DRIFTS studies were performed in order to understand the mechanism of selective oxidation of ethanol. V-MCM-41 was found to be much more active than pure MCM-41, favouring the formation of high amounts of ethylene over 300 degrees C. MCM-41, on the other hand, was found to favour the formation of acetaldehyde over ethylene at all studied temperatures. It was shown by reaction findings that over V-MCM-41, ethylene was produced mainly in the presence of gas phase oxygen whereas acetaldehyde was produced using the lattice oxygen even in the absence of gas phase oxygen. DRIFTS studies indicated the formation of acetaldehyde molecules from acetate-like surface species which were formed by the removal of a hydrogen atom from the beta-carbon of chemisorbed ethoxy species by the help of the lattice oxygen. On the other hand, removal of a hydrogen atom from the beta-carbon of the ethoxy species, in the presence of gas phase oxygen, resulted in the formation of vinyl-like surface species which then yielded ethylene molecules.