The transformation of cellulose or cellulose-derived carbohydrates into platform chemicals is the key to establish biomass-based sustainable chemical processes. The systems able to catalyze the conversion of cellulose into key chemicals in water without the consumption of hydrogen are limited. We report that simple vanadyl (VO2+) cations catalyze the conversions of cellulose and its monomer, glucose, into lactic acid and formic acid in water. We have discovered an interesting shift of the major product from formic acid to lactic acid on switching the reaction atmosphere from oxygen to nitrogen. Our studies suggest that VO2+ catalyzes the isomerization of glucose to fructose, the retro-aldol fragmentation of fructose to two trioses, and the isomerization of trioses, which leads to the formation of lactic acid under anaerobic conditions. The oxidative cleavage of CC bonds in the intermediates caused by the redox conversion of VO2+/VO2+ under aerobic conditions results in formic acid and CO2. We demonstrate that the addition of an alcohol suppresses the formation of CO2 and enhances the formic acid yield significantly to 70–75 %.