Cellulose, a major component of woody biomass, was reacted in hot-compressed water using a sodium carbonate catalyst, a reduced nickel catalyst or no catalyst at different reaction temperatures from 200 to 350 degrees C. The reaction mixture was separated into oil, gases, residue and aqueous phase to discuss the reaction mechanism based on the product distribution. Hydrolysis can play an important role in forming glucose/oligomer, and the obtained glucose/oligomer can decompose quickly to non-glucose aqueous products, oil, char and gases. Under the catalyst-free condition, the interpretation of the observation led to a simplified reaction scheme, which produced finally char and gases through oil as intermediates. With regard to the alkali catalyst, the observation suggested a role of the alkali catalyst in inhibiting the formation of char from oil (stabilization of oil); resulting in oil production. On the other hand, the nickel catalyst could catalyze the steam reforming reaction of aqueous products as intermediates and the methanation reaction.