The acid-catalyzed formation of carbon-carbon bonds from C1 precursors via CO insertion into chemisorbed methyl groups occurs selectively within eight-membered ring (8-MR) zeolite channels. This elementary step controls catalytic carbonylation rates of dimethyl ether (DME) to methyl acetate. The number of O-H groups within 8-MR channels was measured by rigorous deconvolution of the infrared bands for O-H groups in cation-exchanged and acid forms of mordenite (M,H-MOR) and ferrierite (H-FER) after adsorption of basic probe molecules of varying size. DME carbonylation rates are proportional to the number of O-H groups within 8-MR channels. Na+ cations selectively replaced protons within 8-MR channels and led to a disproportionate decrease in carbonylation turnover rates (per total H+). These conclusions are consistent with the low or undetectable rates of carbonylation on zeolites without 8-MR channels (H-BEA, H-FAU, H-MFI). Such specificity of methyl reactivity upon confinement within small channels appears to be unprecedented in catalysis by microporous solids, which typically select reactions by size exclusion of bulkier transition states.