This work deals with evaluating the ability of new synthesized xerogel‐based activated carbons (XACs) to provide a low toxic urea‐formaldehyde adhesive system, as well as good quality bagasse‐composites. The xerogels were synthesized from resorcinol and different chain length aliphatic aldehydes. A preliminarily study was carried out to evaluate the adsorption capacity of formaldehyde by these investigated XACs. Differential scanning calorimetry, non‐isothermal thermogravimetric analysis, infra‐red spectra, gel time, and bond strength tests were carried out to evaluate the performance of XAC‐UF adhesive systems, in comparison with commercial UF. The modulus of rupture, modulus of elasticity, internal bond strength, thickness swelling, and free‐HCHO of board were also examined to evaluate the quality of final bagasse‐composites. The results show that, the investigated XACs had a positive effect on the adsorption of formaldehyde. The HCHO‐adsorption capacities of XACs ranged from 111 to 200 mg/g XAC. However, butyraldehyde‐based XAC had higher formaldehyde adsorption capacity. Moreover, XACs led to an increase in thermal stability of the UF adhesive system and improved properties of the resulted bagasse composite. Greater improvement was noticed by applying butyraldehyde‐based XAC‐UF adhesive system. Its MOR (26.6 MPa) and MOE (4082 MPa) that exceeded the ANSI standard requirements for wood particleboard of class H‐3; while, its IB value (0.44 MPa) exceeded the M‐2 grade. Applying the butyraldehyde‐based XAC adhesive system also led to reduction of the free‐HCHO of the produced bagasse composite by approximately 38%.