NOVELTY - Digestion of cellulosic biomass solids in presence of phenolic solvent generated in situ from lignin, involves heating cellulosic biomass solids and digestion medium having organic solvent in digestion unit in presence of molecular hydrogen and slurry catalyst, to form alcoholic component and liberating lignin from cellulosic biomass solids into digestion medium; removing portion of biphasic mixture from digestion unit; converting lignin into phenolic solvent; and returning phenolic solvent to digestion unit while heating cellulosic biomass solids and digestion medium.    USE - For digesting cellulosic biomass solids in the presence of a phenolic solvent generated in situ from lignin (claimed) which is used in forming fuel blends and other materials.    ADVANTAGE - The method provides efficient conversion of cellulosic biomass into fuel blends and other materials; and is simple, cost-efficient, high-yield and energy-efficient digestion method.    DETAILED DESCRIPTION - Digestion of cellulosic biomass solids in the presence of a phenolic solvent generated in situ from lignin, involves providing cellulosic biomass solids in a digestion medium comprising greater than or equal to 50 vol.% an organic solvent, where the cellulosic biomass solids comprise 50 mass.% water; heating the cellulosic biomass solids and the digestion medium in a digestion unit in the presence of molecular hydrogen and a slurry catalyst capable of activating molecular hydrogen, to form an alcoholic component derived from the cellulosic biomass solids and liberating lignin from the cellulosic biomass solids into the digestion medium, where the water from the cellulosic biomass solids forms a biphasic mixture with the digestion medium as the cellulosic biomass solids are heated, and the biphasic mixture comprises an organic phase and an aqueous phase; removing at least a portion of the biphasic mixture from the digestion unit, where the biphasic mixture contain the alcoholic component, the lignin and the slurry catalyst; converting at least a portion of the lignin into a phenolic solvent; and returning at least a portion of the phenolic solvent to the digestion unit while heating the cellulosic biomass solids and the digestion medium.