Cobalt‐copper (CoCu) catalysts have industrial potential in CO/CO2 hydrogenation reactions, and CoCu alloy has been elucidated as a major active phase during reactions. However, due to elemental surface segregation and dealloying phenomena, the actual surface morphology of CoCu alloy is still unclear. Combining theory and experiment, the dual effect of surface segregation and varied CO coverage over the CoCu(111) surface on the reactivity in CO2 hydrogenation reactions is explored. The relationship between C−O bond scission and further hydrogenation of intermediate *CH2O was discovered to be a key step to promote ethanol production. The theoretical investigation suggests that moderate Co segregation provides a suitable surface Co ensemble with lateral interactions of co‐adsorbed *CO, leading to promoted selectivity to ethanol, in agreement with theory‐inspired experiments. A method is described for theory‐based catalyst optimization of CoCu alloys in CO2 hydrogenation. Moderate Co surface segregation, boosted ethanol production, and suppressed methane generation suggest that theory‐guided catalyst optimization could be beneficial in similar alloy systems.