The CO-H₂ reaction over oxide catalysts selectively forms branched carbon chain compounds. The selectivity of isobutene formed using ZrO₂ catalyst at 623 and 673K was more than 70% of the total hydrocarbons. CeO₂ catalyst formed ethylene as the main product at 673K, and the C4 hydrocarbon selectivity was about 30%. However, the isobutene selectivity in the C₄ hydrocarbons was more than 80%. The reaction over ZrO₂ catalyst at 523K formed methanol exclusively, while CeO₂ catalyst yielded diisopropyl ketone and 2-methylpropanal as two main products. The reaction mechanism was investigated by means of in situ IR, CP MAS NMR, and chemical trapping methods. The following reaction path, consisting of two key reactions, was proposed: η²-formaldehyde species formed from CO and H₂ underwent thermal decomposition yielding methyl, μ-methylene, or carbene species followed by carbonylation yielding ethanal. The aldol condensation type reaction of ethanal with formaldehyde yielded 2-methylpropanal, whose hydrogenation and dehydration yielded isobutene. The ketonization of ethanal followed by the aldol condensation type reaction formed ketones such as diisopropyl ketone. The reaction rate with oxide catalysts was usually lower than that with transition metal catalysts by about two orders of magnitude. The search for the oxide catalysts with higher activity for the CO-H₂ reaction led to the three component catalysts of Fe₂O₃- or CoO-CeO₂-ZrO₂, whose activity was 6 times larger than that of ZrO₂ catalyst.