The development of an economically attractive process with abundant and readily available raw feedstocks to achieve the upgrading of biomass is highly desirable. Unlike conventional fast pyrolysis followed by hydrotreating for upgraded bio-oil production under high pressure in which expensive and naturally unavailable hydrogen is heavily engaged, this work clearly demonstrates the feasibility of upgrading biomass by directly using cheap natural gas on zeolite-supported catalyst at atmospheric pressure. The introduction of methane during biomass pyrolysis not only increased the yield of the collected oil from 6.79 to 7.48 wt % but also improved its quality in terms of higher H/C ratio, from 1.21 to 1.71, under the facilitation of Ag/ZSM-5 catalyst. A synergistic effect was clearly observed among methane, biomass pyrolysis, and catalyst, which contributed to the exciting performance. This novel process can be extended to the conversion of coals, other biomass, and heavy oil to more valuable products.