Abstract The one‐pot production of industrially valuable diketone derivatives from carbohydrates is achieved through a bifunctional catalytic process. In particular, Pd/C‐catalyzed hydrogenation of HMF in water and under CO 2 affords 1‐hydroxypentane‐2,5‐dione with up to 77 % yield. The process is also eligible starting from fructose and inulin, affording 1‐hydroxyhexane‐2,5‐dione with 36 % and 15 % yield, respectively. The key of the process is reversible in situ formation of carbonic acid, which is capable of assisting Pd/C during the hydrogenation reaction by promoting the dehydration of carbohydrates and the ring‐opening of furanic intermediates. Interestingly, by changing the reaction medium from H 2 O to a H 2 O/THF mixture (1:9), it is possible to switch the selectivity of the reaction and to produce 2,5‐hexanadione with 83 % yield. Within the framework of sustainable chemistry, reactions presented in this report show 100 % carbon economy, involve CO 2 to generate acidity, require water as a solvent, and are conducted under rather low hydrogen pressures (10 bar).