NOVELTY - Biomass conversion system comprises: hydrothermal digestion unit containing slurry catalyst capable of activating molecular hydrogen; optional hydrogen feed line operatively connected to the digestion unit; a fluid circulation loop comprising the digestion unit and a catalytic reduction reactor unit containing slurry catalyst; a pretreatment digestion unit that is not part of the fluid circulation loop and does not contain the slurry catalyst; and a solids transport mechanism operatively connecting the pretreatment digestion unit to hydrothermal digestion unit.    USE - The system is useful for processing cellulosic biomass (claimed) to produce biofuel.    ADVANTAGE - The system: provides thermal stabilization of soluble carbohydrates; utilizes slurry catalyst that allows insitu catalytic reduction reactions, thus intercepting and transforming soluble carbohydrates into more stable reaction product and feasible after soluble carbohydrate form, is poison-tolerant catalyst and regenerable through exposure to water having a temperature of at least 200 degrees C; allows high yield conversion of cellulosic biomass solids into desired reaction product in timely manner; lowers the amount of additional energy input needed to conduct digestion; exhibits minimal heat transfer loss; and reduces capital and operational costs. The insitu catalytic reduction reaction provides a growing supply of reaction product within the hydrothermal digestion unit, which serves as and/or replenish the digestion solvent. Since the reaction product and digestion solvent are same there is no need to separate and recycle a majority of digestion solvent before further processing the reaction product down stream, thus saving energy.    DETAILED DESCRIPTION - An INDEPENDENT CLAIM is also included for processing cellulosic biomass solid comprising: providing cellulosic biomass solids in the pretreatment digestion unit; heating the cellulosic biomass solids in the pretreatment digestion unit at a first temperature for a first time period, where the first temperature and first time remove at least a portion of the hemicellulose and lignins from the cellulosic biomass solids, thus producing a biomass pulp; transferring at least a portion of the biomass pulp to the hydrothermal digestion unit; heating the biomass pulp in the hydrothermal digestion unit at a second temperature for a second time in the presence of molecular hydrogen while circulating the slurry catalyst, where the second temperature and second time digest at least a portion of the cellulose, thus forming hydrolyzate comprising soluble carbohydrates within a liquor phase; at least partially transforming the soluble carbohydrates into a reaction product via a catalytic reduction reaction while the soluble carbohydrates are within the hydrothermal digestion unit; and transferring at least a portion of the liquor phase to a catalytic reduction reactor unit that also contains the slurry catalyst, so as to further transform the soluble carbohydrates into the reaction product.