The recently developed polyoxometalate (POM)− ionosolv concept offers an interesting strategy to generate two valuable product streams from lignocellulosic biomass, a solid cellulose-rich pulp and short-chain carboxylic acids like formic acid and acetic acid in a simple and cost-efficient manner. This study aimed to find optimum parameters for the two steps of the transformation by performing a sensitivity analysis on the initial ionosolv fractionation step as well as kinetic investigations of the following POM-catalyzed oxidation step. The results were transferred to the POM−ionosolv concept to find the overall process optimum. Beech wood was used as an industrially relevant substrate for ionosolv fractionation with the low-cost ionic liquid triethylammonium sulfate, [TEA][HSO 4 ], and the HPA-5 [H 8 PV 5 Mo 7 O 40 ] POM catalyst for the oxidation of the dissolved components in an oxygen atmosphere. As the most seminal finding, we defined optimum conditions of 125 °C, 1200 rpm, 30 bar oxygen, and 24 h reaction time in ionic liquid containing 70% water, achieving 72% xylose extraction from beech wood, which resulted in a 39% formic acid yield. We suggest that the fractionation and catalytic conversion are carried out at different water contents for maximum conversion efficiency for each step.