Gold nanoparticles (AuNP) supported on spinel MgCuCr2O4 are highly active and selective for the oxidation of ethanol with molecular oxygen to acetaldehyde (conversion 100%; yield ~95%). The catalyst is shown to be stable for at least 500 h. The unprecedented catalytic performance is understood in terms of strong synergy between metallic AuNPs and surface Cu+ species. X-ray photoelectron spectroscopy shows that Cu+ is already formed during catalyst preparation and becomes more dominant at the surface during the ethanol oxidation reaction. These Cu+ species are stabilized at the surface of the ternary MgCuCr2O4-spinel support. Further kinetic measurements indicate that the Cu+ species act as sites for O2 activation.