In this study, Iranian bagasse was gasified and liquefied in a supercritical methanol/subcritical water medium in presence of potassium promoted Cu/γ‐Al2O3‐MgO catalysts to generate H2, alcohols, and ethers. Iranian bagasse as a waste cellulosic biomass in sugarcane industry was selected for the process feedstock. The gaseous and liquid products were evaluated in presence of catalysts with different potassium contents. Decrease in liquid production was observed with increasre in promoter content up to 2.5% but further promoter content addition increased liquid production. So that the catalyst with 10% potassium content showed liquid production 1.7 times more than catalyst with no potassium content. However, it was demonstrated that catalyst with copper content of 20% and potassium content of 2.5% also could make process most selective for alcohols and ethers producing. The produced alcohols and ethers percentage and selectivity in liquid product for this catalyst were approximately 40% and 5%, respectively. Production of gaseous products also showed a minimum amount of total produced gas at potassium content of 5%. Hydrogen that was another target product was obtained up to 310 mmole. © 2017 American Institute of Chemical Engineers Environ Prog, 37: 861–869, 2018