A process of preparing alkylhydroxyalkylcellulose (e.g., methylhydroxyethylcellulose and methylhydroxypropylcellulose) by reaction of cellulose in the presence of alkali metal hydroxide with an alkylating agent and a hydroxyalkylating agent is described. The process includes: (a) alkalizing cellulose by means of 0.9 to 2.9 equivalents of an alkali metal hydroxide I/AGU of the cellulose in the form of an aqueous alkali metal hydroxide solution, in the presence of a suspension medium containing at least 0.2 equivalents of an alkylating agent I/AGU of the cellulose; (b) reacting the alkalized cellulose of step (a) with alkylating agent I and a hydroxyalkylating agent at a temperature above 65.degree. C.; (c) adding additional alkali metal hydroxide 11 in the form of an aqueous alkali metal hydroxide solution; and (d) adding additional alkylating agent 11 in an amount of at least the absolute value of the difference between (i) the number of equivalents of alkylating agent I/AGU of the cellulose already added, and (ii) the total number of equivalents of alkali metal hydroxide/AGU of the cellulose added. Additional alkylating agent 11 is not added in step (d) if (i) the number of equivalents of alkylating agent I/AGU of the cellulose already added exceeds (ii) the total number of equivalents of alkali metal hydroxide/AGU of the cellulose already added. In a further step (e), the alkylhydroxyalkylcellulose is isolated from the reaction mixture. The isolated alkylhydroxyalkylcellulose may be optionally purified.