The catalytic properties of the industrial “palladium on sibunit” catalyst (ICT-3-31, 0.5 wt % Pd) were studied in the reduction of menthone into menthol. Menthone was reduced both at 250 and 350°C using isopropanol as an H-donor under the conditions of the hydrogen transfer reaction (HTR). For comparison, a noncatalytic reaction was performed under the same conditions. At 350°C the conversion of menthone was the same (61–62%) in the presence of the catalyst and without it. In the reaction with the catalyst, the selectivity on the desired product menthol decreased considerably (from 98% down to 23%), and the amount of the by-products increased (from 2 up to 77% based on changed menthone). When the temperature of the catalytic reaction was lowered to 250°C, the reduction selectivity increased to 42%, but the conversion of menthone decreased to 10%. All the products of menthone conversion were identified and pathways of their formation suggested. At 250–350°C the carbon support sibunit catalyzed the dehydration of menthone, which hindered the satisfactory yields of the target alcohol. Other side reactions catalyzed by ICT-3-31 were dehydrogenation into p-menthenes and their further aromatization resulted in the formation of substituted benzenes—p-cymene and thymol. ICT-3-31 can be effectively used in HTR, if more reactive organic substrates are involved in the reaction below 200–250°C or stronger H-donors are applied.