In the pursuit of selective conversion of methane directly to methanol in the liquid-phase, a common challenge is the concurrent formation of undesirable liquid oxygenates or combustion byproducts. However, we demonstrate that monometallic Pd-CeO2 catalysts, modified by carbon, created by a simple mechanochemical synthesis method exhibit 100% selectivity toward methanol at 75 °C, using hydrogen peroxide as oxidizing agent. The solvent free synthesis yields a distinctive Pd-iC-CeO2 interface, where interfacial carbon (iC) modulates metal-oxide interactions and facilitates tandem methane activation and peroxide decomposition, thus resulting in an exclusive methanol selectivity of 100% with a yield of 117 μmol/gcat at 75 °C. Notably, solvent interactions of H2O2 (aq) were found to be critical for methanol selectivity through a density functional theory (DFT)-simulated Eley-Rideal-like mechanism. This mechanism uniquely enables the direct conversion of methane into methanol via a solid-liquid-gas process.