A direct reduction of NiO into Ni was investigated by using cellulose as a reducing agent under mild hydrothermal conditions. The results showed that NiO can be reduced completely to Ni at 250 degrees C in the presence of NaOH. Meanwhile, cellulose was converted into value-added chemicals, such as lactic acid and acetic acid. A possible mechanism for reduction of NiO into Ni with cellulose under alkaline hydrothermal conditions was proposed. The method provides a comparative green and efficient conversion of NiO into Ni without an expensive and toxic reducing agent at low temperatures.