Methanol occupies a central role in chemical synthesis and is considered an ideal candidate for cleaner fuel storage and transportation. It can be catalyzed from water and volatile organic compounds such as carbon dioxide, thereby offering an attractive solution for reducing carbon emissions. However molecular-level experimental observations of the catalytic process are scarce, and most existing catalysts tend to rely on empirically optimized, expensive and complex nano- composite materials. This lack of molecular-level insights has precluded the development of simpler, more cost-effective alternatives. Here we show that graphite immersed in ultrapure water is able to spontaneously catalyze methanol from volatile organic compounds in ambient conditions. Using single-molecule resolution atomic force microscopy (AFM) in liquid, we directly observe the formation and evolution of methanol-water nanostructures at the surface of graphite. These molecularly ordered structures nucleate near catalytically active surface features such as atomic step edges and grow progressively as further methanol is being catalyzed. Complementary nuclear magnetic resonance analysis of the liquid confirms the formation of methanol and quantifies its concentration. We also show that electric fields significantly enhance the catalysis rate, even when as small as that induced by the natural surface potential of the silicon AFM tip. These findings could have a significant impact on the development of organic catalysts and on the function of nanoscale carbon devices.