A new type of catalyst has been designed to adjust the basicity and level of molecular confinement of KNaX faujasites by controlled incorporation of Mg through ion exchange and precipitation of extraframework MgO clusters at varying loadings. The catalytic performance of these catalysts was compared in the conversion of C₂ and C₄ aldehydes to value‐added products. The product distribution depends on both the level of acetaldehyde conversion and the fraction of magnesium as extraframework species. These species form rather uniform and highly dispersed nanostructures that resemble nanopetals. Specifically, the sample containing Mg only in the form of exchangeable Mg²⁺ ions has much lower activity than those in which a significant fraction of Mg exists as extraframework MgO. Both the (C₆+C₈)/C₄ and C₈/C₆ ratios increase with additional extraframework Mg at high acetaldehyde conversion levels. These differences in product distribution can be attributed to 1) higher basicity density on the samples with extraframework species, and 2) enhanced confinement inside the zeolite cages in the presence of these species. Additionally, the formation of linear or aromatic C₈ aldehyde compounds depends on the position on the crotonaldehyde molecule from which abstraction of a proton occurs. In addition, catalysts with different confinement effects result in different C₈ products.