C.sub.4 compounds including n-butanol and n-butanal are produced by reacting methanol, hydrogen, and carbon monoxide, in the presence of a cobalt catalyst selected from the group consisting of (a) a cobalt carbonyl, (b) a hydrido cobalt carbonyl and (c) a cobalt-containing material convertible to a cobalt carbonyl or a hydrido cobalt carbonyl, an iodine promotor and an organic sulfide having the formula:R.sub.1 --S--R.sub.2wherein R.sub.1 and R.sub.2 can be the same or different members selected from the group consisting of saturated or unsaturated, straight or branched chain alkyl radicals having from one to 24 carbon atoms, cycloalkyl radicals having from three to 40 carbon atoms, aryl radicals having from six to 20 carbon atoms, aralkyl and alkaryl radicals having from six to 40 carbon atoms and halogen substituted derivatives thereof. A high degree of selectivity towards the formation of butanol and butanal is provided by using the cobalt entity and the organic sulfide in a molar ratio in the range of about 2:1 to about 1:10, based on elemental cobalt and sulfur. The reaction is conducted at elevated temperature and pressure conditions for a time sufficient to convert methanol to n-butanol and n-butanal.