For cellulosic ethanol production, efficient hydrolysis of crystalline cellulose to easily fermentable sugars is important. The focus of this study is to maximize the yield of cellulose hydrolysis in subcritical and supercritical water at practically achievable reaction times. Microcrystal line cellulose is treated with subcritical and supercritical water in a temperature range of 302-405 degrees C, at a pressure of 27.6 MPa, and residence times of 2.5-8.1 s. Cellulose-water slurry of 2.7 wt % after mixing with preheated water is rapidly heated to the reaction temperature and then the reaction product is rapidly cooled in a continuous reactor. Cellulose partially dissolves in subcritical water at 302 degrees C and completely dissolves at 330 degrees C. About 65% of cellulose converts to the oligomers and monomers at 335 degrees C in 4.8 s and also at 354 degrees C in 3.5 s. Upon increase in the reaction time or temperature to supercritical region, oligomers and monomers partially degrade to glycoaldehyde dimer, D-fructose, 1,3-dihydroxyacetone dimer, anhydroglucose, 5-HMF, and furfural. The effect of temperature, pressure, and reaction time on formation of various products is studied. In addition, the effect of a base catalyst, K2CO3, is examined. The catalyst increases cellulose gasification in the temperature range studied (302-333 degrees C).