Abstract Sorption enhanced steam reforming of methanol (SESRM) can significantly promote the hydrogen production process with simultaneous CO2 sorption. The mechanical mixture of catalysts and sorbents as a conventional approach is complex and requires high temperatures for regeneration, which results in serious sintering of Cu-based catalysts. This paper describes a novel Cu-MgO/Al2O3 bifunctional catalysts (xCMA, x is denoted as the mass fraction of Cu, 0%–10%) via a sol–gel method for the SESRM process. We find that Cu species, including metallic Cu and Cu ions, co-exist on the catalyst. The metallic Cu on the catalyst surface is an active site for methanol steam reforming while the Cu ion in MgO lattice promotes the CO2 sorption capacity. Moreover, the incorporation of Cu ion into MgO also facilitates CO2 desorption by forming more bidentate carbonates. Due to the strong interaction between Cu and MgO, the Cu sintering is inhabited in comparison with the mechanical mixture of catalysts and sorbents. Meanwhile, MgO is found to induce more formate species to inhibit the generation of carbon monoxide. As a result, the optimal bifunctional catalyst, 8 wt% Cu-MgO/Al2O3 (8CMA) shows a superior performance in both catalytic reforming and CO2 sorption with a highest H2 selectivity of 99.3% and lowest CO selectivity (