A new high-yield pulping process based on ethanol pretreatment and steam cooking was studied. The effect of processing conditions (cooking temperature at six levels and ethanol concentration at five levels) was determined. Optimum results appeared at 30% ethanol concentration and with cooking at 195 °C. The cooking liquor was analyzed by GC-MS and low-molecular lignin fragments were identified. Alcohol in alkaline medium destroys the three-dimensional lignin structure by cleavage of ether bonds, increases the penetration of the impregnation solution (higher sulfonation) and solubilizes lignin. Ethanol treatment facilitates fiber separation in the middle lamella. Pulp prepared under optimal conditions has higher flexibility, conformability and better bonding ability when compared with other samples. Higher concentrations of ethanol (above 30%) might cause precipitation of lignin on the fiber surface.