The selective valorization of lignin-derived quinones into high-value aliphatic alcohols is a sustainable yet challenging route for biomass upcycling, particularly in environmentally benign media. Herein, we report a robust catalytic strategy for the selective hydrodeoxygenation (HDO) of 2,6-dimethoxy-1,4-benzoquinone (DMBQ) to 1,4-cyclohexanediol (CHDO) in neat water. Using a wet-chemical approach, ultra-small ruthenium (Ru) nanoclusters were precisely engineered onto rod-shaped CeO₂ supports. The resulting Ru/CeO₂ catalyst, with a low Ru loading of ~ 0.97 wt.%, achieves an unprecedented CHDO yield of 96.7% at 200 °C and 2 MPa H₂, significantly outperforming current benchmarks involving organic solvents. Advanced characterizations (aberration corrected-high-angle annular dark-field scanning transmission electron microscopy (AC-HAADF-STEM) and X-ray absorption fine structure (XAFS)) reveal that strong metal–support interactions (SMSI) stabilize the Ru nanoclusters and generate abundant interfacial oxygen vacancies. These sites work synergistically to activate C–O bonds, facilitating a kinetically preferred “deoxygenation-before-saturation” pathway that suppresses over-hydrogenated byproducts. This study not only overcomes the limitations of poor solubility and low selectivity in aqueous systems but also provides atomic-level insights into designing cluster-based catalysts for complex biomass transformations.