The present inventors has discovered that, hydrolysis of microcrystalline cellulose into valuable products like Cellobiose, glucose and xylose with water soluble oligomers with high yields and better conversion by using magnetically separable functionalized graphene!  graphene oxide. Reusability of the catalyst is also confirmed by the inventors by repeating the reaction. Hydrolysis of cellulose into saccharides using a magnetically separable functionalized graphene is reported for potential application in the environmentally benign saccharification of cellulose. Crystalline pure cellulose is hydrolyzed by the graphene bearing -SO₃H, *COOH and -OH functions along with iron nanoparticles. We observed nearly complete cellulose hydrolysis of cellulose into glucose and small (4-5 unit size) oligomers using low (1:1) catalyst to cellulose ratio. The apparent activation energy for the hydrolysis of cellulose into glucose using these catalysts is estimated to be 12 kJ mol- 1, several times smaller than that for sulfuric acid under optimal conditions (170 kJ mol-1). The catalyst can be readily magnetically separated from the saccharide solution after reaction for reuse in the reaction without loss of activity. Nearly complete hydrolysis of sugarcane bagasse into water soluble sachharides with repeated recycling use was also possible. The catalytic performance of the graphene-based catalyst is attributed to the ability of the water soluble nanostructured material with large concentration of polar groups (-OH, -COOH) to readily adsorb cellulose, while providing large concentration of acidic functionality to hydrolyze cellulose.)