An active bifunctional nickel-based catalyst was prepared by decomposing Ni(CO)4 to dispersive metallic Ni on Hβ zeolite and successfully applied in the catalytic hydroconversion (CHC) of an alkali lignin (AL). Detailed elemental composition, functional groups, and molecular compositions of the soluble portions (SPs) from non-catalytic hydroconversion (SPNCHC) and CHC (SPCHC) were characterized with an elemental analyzer, a Fourier transform infrared spectrometer, and a gas chromatograph/mass spectrometer (GC/MS). As a result, alkoxalkanes, phenol, cresol, veratrols, alkyl-substituted 1,4-dimethoxyphenols, 2,5-dimethylfuran, 3-hydroxyneopentanal, 4-methylpent-3-en-2-one, 4-methoxy-4-methylpentan-2-one, 1-(2,4-dihydroxy-3-tolyl)propan-1-one, and 2,5-dimethylhex-4-enoic acid only appear in SPCHC, and yields of multiple alkyl-substituted phenols, p-alkylanisoles, diols, non-substituted and alkyl-substituted methoxyphenols, and substituted phenylethanones in SPCHC are significantly higher than those in SPNCHC. The mechanism for catalytically hydrocracking >CH-O- bridged bonds over Ni/Hβ is proposed using benzyloxybenzene (BOB) and phenethoxybenzene as AL-related model compounds. Ni/Hβ proved to be stable after 3 cycles with relatively small loss in catalytic activity for catalyzing the hydrocracking of >CH-O- bonds in BOB.