The reaction of methanol with synthesis gas to form ethanol in the presence of a cobalt catalyst has been known for many years. The problems relating to the commercial development of this reaction arise from the severe physical conditions required, the low yield of ethanol produced, and wide distribution of products obtained. The objectives of the study were: (i) to assess the influence of physical conditions (pressure, temperature, gas composition) on the reaction, (ii) to examine the effect of promoters and ligand stabilisers on the system, and (iii) to identify any catalytic intermediates observed under reaction conditions. This work employed three major investigative techniques: high pressure infra-red studies, autoclave reactions and basic atmospheric pressure nitrogen line chemistry. A coordinated study of the reactions of the system's components with each other was performed while the complexity of the system was gradually increased. The effects of changing physical parameters such as temperature, pressure, synthesis gas composition etc. were also investigated. The influences of promoter and ligand type on the reaction were also studied. The species observed to be present in the reacting system by high pressure infra-red spectroscopy are related to the proposed mechanism for the reaction. The effect on the reaction of promoters (iodine or iodide) and stabilising ligands (phosphine, arsine or stibine) is discussed in relationship with the chemical and physical properties of the intermediates. The role of solvents in the homologation reaction is considered with regard to the possibility of phase transfer taking place between a carbon monoxide-rich methanol layer and hydrogen-rich hydrocarbon layer. The results from the high pressure autoclave studies are used to determine the most efficient conditions for synthesis of ethanol in terms of the catalyst composition and physical reaction conditions. The high pressure infra-red studies enabled intermediate species to be identified and a reaction mechanism is proposed incorporating this new information.