Ab initio molecular dynamics (MD) simulations were employed to elucidate xylose and glucose degradation pathways. In the case of xylose, a 2,5-anhydride intermediate was observed leading to the formation of furfural through elimination of water. This pathway agrees with one of the mechanisms proposed in the literature in that no open chain intermediates were found. In the case of glucose, a series of intermediates were observed before forming the 2,5-anhydride intermediate that eventually leads to hydroxymethylfurfural (HMF). One of these intermediates was a very short-lived open-chain form. Furthermore, two novel side-reaction pathways were identified, which lead to degradation products other than HMF.