Abstract Lignocellulosic biomass was decomposed to produce crude bio-oil in water and ethanol using hydrated cerium (III) chloride as a catalyst. Use of the catalyst affected not only the yield of crude bio-oil but also the composition of bio-crude for both water and ethanol. The catalyst had a detrimental effect on the crude bio-oil yields obtained from water processing for all runs. However, in ethanol, use of the catalyst improved the crude bio-oil yields in all tested runs. The solid residue yields decreased with the catalyst use in the runs with water but increased in all studies with ethanol, except those with the shortest tested residence time of 10 min. The highest crude bio-oil yield of 48.2 wt% was obtained at 300 °C using 5 mmol of hydrated cerium (III) chloride at a residence time of 90 min in ethanol. The heating values of the crude bio-oils increased with the catalyst use for both water and ethanol processing. The highest heating value of 33.3 MJ kg −1 was obtained with hydrated cerium (III) chloride at 300 °C and a residence time of 120 min.