The Lyocell process is a modern and environmentally fully compatible industrial fiber-making technology. Cellulosic pulp is dissolved without chemical derivatization in a melt of N-methylmorpholine-N-oxide monohydrate (NMMO). In the present work, the reactions of monosaccharides under Lyocell conditions were investigated in detail, using capillary zone electrophoresis as the analytical technique to clarify the composition of reaction mixtures and to follow the kinetics. Under Lyocell conditions, xylose and glucose undergo two competitive reactions: rapid conversion to nonreducing products, and complete isomerization involving the whole carbohydrate backbone, via ketose intermediates. Sugar acids are present in minor amounts only, as demonstrated by employing isotopically labeled material for NMR techniques.