The co-gasification of biomass and plastics can solve the problems of seasonal biomass supply and plastic waste disposal. The product distribution characteristics and reaction mechanisms of the steam co-gasification of biomass and plastics represented by cellulose (CE) and polyethylene (PE) are difficult to obtain only by experimental methods. In this paper, a simulation method integrating reactive force field molecular dynamics (ReaxFF MD) and density functional theory (DFT) was employed to reproduce the synergistic behavior at the atomic level. The co-gasification process accelerates the cleavage of long-chain char and improves the conversion of CE/PE into oil and gas. The yield of oxygen-containing tar declines by 78.3% with increasing PE:CE mass ratio from 1:4 to 4:1, and the addition of water increases the concentration of hydrogen by 95.4%. The light hydrocarbon groups released from PE assist in the decomposition of oxygen-containing components in CE to generate small-molecule gases. Eight formation pathways of furans and cyclic ketones are designed to determine vital precursors for gas generation in the co-gasification of CE and PE. Furfural undergoes reactions such as hydrogen abstraction, β-scission, isomerization, direct homolysis, and hydrogen transfer to produce methane and hydrogen. The co-gasification also favors the formation of carbon monoxide rather than carbon dioxide due to more paths and lower energy barriers. ReaxFF coupled with DFT method can effectively determine the reaction mechanism of steam co-gasification, which is a guide for predicting the overall evolution tendency.