The reaction pathway of ethanol steam reforming on Co–ZrO2 has been identified and the active sites associated with each step are proposed. Ethanol is converted into acetaldehyde and then into acetone, followed by acetone steam reforming. More than 90% of carbon was found to follow this reaction pathway. N2 sorption, X-ray diffraction (XRD), temperature-programmed reduction (TPR), in situ X-ray photoelectron spectroscopy (XPS), transmission electron microscopy, as well as theoretical density functional theory (DFT) calculations have been employed to identify the structure and functionality of the catalysts, which was further used to correlate their performance in ethanol steam reforming (ESR). It was found that metallic cobalt is mainly responsible for the acetone steam-reforming reactions, while CoO and basic sites on the support play a key role in converting ethanol into acetone via dehydrogenation and condensation/ketonization reaction pathways. The current work provides fundamental understanding of the ethanol steam-reforming reaction mechanisms on Co–ZrO2 catalysts and sheds light on the rational design of selective and durable ethanol steam-reforming catalysts.