Obtaining renewable fuels and chemicals from lignin presents an important challenge to the use of lignocellulosic biomass in order to meet sustainability and energy goals. We report on a thermocatalytic process for the depolymerization of lignin in supercritical ethanol over a CuMgAlOx catalyst. Ethanol as solvent results in much higher monomer yields than methanol, because ethanol effectively scavenges formaldehyde derived from lignin. Experiments with phenol and alkylated phenols point out the critical role of phenolic –OH groups and formaldehyde in undesired repolymerization reactions. O-alkylation and C-alkylation capping reactions with ethanol hinder repolymerization of the phenolic monomers formed during lignin disassembly. After reaction in ethanol at 380 °C for 8 h, this process delivers high yield of mainly alkylated mono-aromatics (60–86 wt%, depending on the lignin used) with a significant degree of deoxygenation. The oxygen-free aromatics can be used to replace reformate or serve as base aromatic chemicals; the oxygenated aromatics can be used as low-sooting diesel fuel additives and as building blocks for polymers.