Alkylation of benzene with carbon dioxide and hydrogen to produce toluene and xylene could increase the added-value of surplus benzene as well as relieve environmental problems like green-house effect. In this work, the alkylation benzene with carbon dioxide and hydrogen reaction was proceeded by using the mixture of zinc-zirconium oxide and HZSM-5 as bifunctional catalyst. The equivalent of Zn/Zr = 1 displays the best catalytic performance at 425 °C and 3.0 MPa, and benzene conversion reaches 42.9% with a selectivity of 90% towards toluene and xylene. Moreover, the carbon dioxide conversion achieves 23.3% and the carbon monoxide selectivity is lower than 35%, indicating that more than 50% carbon dioxide has been effectively incorporated into the target product, which is the best result as far as we know. Combined with characterizations, it indicated that the Zn and Zr formed a solid solution under specific conditions (Zn/Zr = 1). The as-formed solid solution not only possesses a high surface area but also provides a large amount of oxygen vacancies. Additionally, the bifunctional catalyst has excellent stabilities that could keep operating without deactivation for at least 80 h. This work provides promising industrial applications for the upgrading of aromatics.