It is a great challenge to cleave CO bonds in lignin during liquefaction of Kraft lignin into fuels as the bond is characterized by high energy, and the complex composition of lignin oil makes it difficult to separate and purify monomers. Hence, there is an urgent need for highly selective catalysts that can help in the cleavage of these high-energy bonds. We aimed to develop effective and inexpensive catalysts for the synthesis of guaiacol compounds. Liquefaction of Kraft lignin was achieved by using a novel N-doped carbon-supported MoC nanoparticle catalyst (MoC-x@NC, x = 0.5, 1, and 1.5). 77.58 wt% of guaiacol compounds was present in 41.5 wt% of lignin oil after liquefaction of lignin. 2-phenoxy-1-phenylethanol was used as model compound to confirm the efficient CO bond-breaking properties of MoC-x@NC. Additionally, it was observed that high-valence molybdenum and metal phosphate on the surface of catalysts promoted the conversion of benzene alcohols to phenols which further enhanced the content of the guaiacol compounds. N-doped graphitic carbon substrate helps in the alkylation of guaiacol into 4-alkyl guaiacol in the presence of alkyl fragments in ethanol.