Hydrothermal treatment of grey alder(Alnus incana (L) Moench) wood at 160-1800C causes authohydrolysis, and the formed water-soluble products are binders for hot moulding and granulation. Heating of water-saturated wood in an autoclave, and saturated steam treatment in a flow or batch reactor were equally effective. Still the flow reactor had 2-3 times less effluent. The modified wood yield was 85-92% on the oven dry wood basis. Its hot water-soluble matter comprised 16 to 24% on the o.d. modified wood basis. The bending strength of the hot moulded boards 35 to 49 MPa is not directly connected with the water-soluble matter content. Carbonisation of slabs at 500 and 9000C produced carbon materials with the bending strength 6.2 – 7.7 MPa and 13.6-16.3 MPa, respectively. Dense and mechanically strong microporous activated carbon was prepared. The porous structure characteristics were close to those of the coconut shell activated carbon: BET surface 1134 and 1440 m2/g, total pore volume 700 and 760 mm3/g, and iodine number 1047 and 1193 mg/g.