The use of Ir as a reactive transition metal for O2 activation to facilitate the selective oxidation of ethanol to acetaldehyde is explored. Co-impregnation of the chlorides of Au and Ir on SiO2 followed by reduction afforded small bimetallic nanoparticles with a varying Au/Ir ratio. All of the nanoparticle catalysts including the monometallic Au and Ir end members have sizes in the range of 2–3 nm. Infrared spectroscopy of adsorbed CO on the reduced catalysts evidences the formation of alloyed nanoparticles. After oxidation at room temperature and at 200 °C, the Ir surface atoms are oxidized. No synergy between Au and Ir is observed in CO oxidation. Au lowers the CO oxidation activity of the pure Ir catalyst, suggesting the presence of surface Au atoms in the mildly oxidized Au–Ir bimetallic catalysts. At higher oxidation temperatures, viz. 350 and 500 °C, bulk oxidation of Ir occurs. While pure Ir nanoparticles sinter upon oxidation at elevated temperatures (350–500 °C), the presence of Au significantly retards this agglomeration of the nanoparticles. At these elevated temperatures, an intimate mixture of reduced Au and IrOx is formed. The Au–Ir nanoparticles display enhanced activity in ethanol oxidation to acetaldehyde, outperforming their monometallic counterparts, with only minimum loss of C2-oxygenates selectivity compared to the pure Au nanoparticle catalyst. The maximum activity is obtained for a Au–Ir3 composition. The present results can be explained by a model involving an intimate contact between Au sites for (dissociative) ethanol adsorption and Ir sites covered by O adatoms which catalyze C–H bond cleavage to yield acetaldehyde.