Various species of hardwood chips were subjected to steam-explosion at 180-230 degrees C for 1-20 min. On steaming, hemicellulose was hydrolyzed partially becoming extractable with water, and lignin was degraded by extensive cleavage of alpha- and beta-aryl ether linkages becoming extractable with organic solvents and/or dilute alkali. The three main components, hemicellulose, lignin, and cellulose, of steam-exploded woods were fractionated by successive extraction with water and 90% dioxane. The water extracts were decolored and purified by chromatography on synthetic adsorbents and ion exchange resins, yielding a mixture of xylose and xylooligosaccharides (DP2 similar to 10). The xylooligosaccharides were hydrolyzed to xylose with hemicellulolytic enzymes immobilized on ceramics having controlled pore size. The yield of xylose was 10-20% based on starting materials. The extracted amounts of lignin were different among wood species. Syringyl lignin became more soluble than guaiacyl lignin on steaming. The lignin extracted was converted to thermoplastic materials, lignin-pitch, by phenolysis followed by heat treatment under vacuum. The lignin-pitch was well spun into fine filaments at a speed of 500-1000 m min(-1) in the temperature range 150-190 degrees C using the melt-spinning method. The filaments were carbonized on heating from room temperature up to 1000 degrees C in a stream of nitrogen. The carbon fiber was obtained in a yield of more than 40% based on the starting materials. The physical properties of the lignin-based carbon fiber was equivalent to a commercial carbon fiber made from petroleum pitch. The residual fibers, mainly cellulose, were hydrolyzed with cellulase derived from Trichoderma viride. Their enzymatic susceptibility was different among wood species. It was higher in species having lower contents of Klason lignin and guaiacyl lignin. Birch and Mollissima acasia were hydrolyzed more than 90%. Finally, the economics of this process are discussed assuming a plant processing 100 t of hardwoods per day.