Pyrolysis of biomass was carried out in a fluidized bed unit (5 kg/h) with the objective of maximizing liquid yield. Liquid product formed in pyrolysis was separated into two phases: water phase and oil phase. The oil phase was upgraded by sulfided Co-Mo-P catalyst in an autoclave. Effects of reaction conditions on the product distribution were investigated, and optimal conditions were therefore concluded. Comparison was made by analysis between the raw oil phase and the upgraded liquid fuel. The significant difference between the raw pyrolytic oil and the upgraded oil was that the former was methanol-soluble while the latter was oil-soluble. (C) 2004 Elsevier Ltd. All rights reserved.