The decomposition of cellobiose (CB) under moderate hydrothermal conditions is studied experimentally using microtubular and pilot-scale flow reactors. The conversion of CB and formation of products, including cellobiulose, glucose, fructose, 5-hydroxymethylfurfural, and 2-furfural, are quantified, accounting for more than 70% of the initial carbon. Organic acids, such as formic, succinic, glycolic, and acetic acids, are identified. The measured proton concentration increases with CB conversion up to 90% in a manner consistent with the formation of a notional acid with a yield of 0.49 +/- 0.11 mol of acid/mol of CB decomposed and pK(a) = 3.33 +/- 0.11. Slow ongoing formation of acids occurs after CB is substantially depleted (X > 90%). The rate of CB decomposition is increased only slightly in the presence of added formic acid, but the selectivity of glucose is enhanced significantly. A thermodynamically consistent kinetic model (40 reversible steps) is developed using reaction pathways, thermodynamics, and kinetics from the literature and our own molecular modeling computations. The model is validated by comparing predictions to our current experiments and other published results. Excellent agreement is obtained without parameter adjustment over the temperature range of 124-320 degrees C. Sensitivity analysis reveals the competition between proton catalyzed and uncatalyzed hydration as well as isomerization and reverse aldol condensation processes.