The understanding of the chemical nature of the oil is important for both the optimization of the process and the design of upgrading strategies for further use as an energy carrier or toward transportation fuels. Hydrothermal treatment (HTT) oil is a complex matrix, whose composition is strongly affected by the feedstock type and by the HTT experimental conditions. In the present work, HTT oil from Desmodesmus sp. was subjected to a detailed chemical analysis. Various characterization techniques (silica gel chromatography, methanolysis, size exclusion chromatography, analytical pyrolysis, elemental analysis, and thermogravimetric techniques) were coupled to gather clearer information on the chemical nature of HTT oil obtained at different reaction times, temperatures, and slurry concentrations. Special attention was paid to the fate of N in the HTT process and the nature of the N-containing species in the oil. By cross-checking results from the chemical characterization of the oil with process data, it was finally possible to identify some different competitive reactions involved in the formation of HTT oil at different conditions. Results show that main compounds obtained at low temperature are still classifiable as lipids, which are extractable without the HTT, together with some short chain algaenan and some hydrophobic protein fragments that end up in the organic solvent phase. At higher temperature (300-375 degrees C), proteins and cellulose started to break down, giving cyclic dipeptides and amino acids side chains (by pyrolysis-like reactions), carbohydrates derivatives (e.g., furans) and products from the cross reaction of proteins and carbohydrates (e.g., formation of alkyl-pyrrolidinones, pyrazines, pyrroles and melanoidin-like materials). This phenomenon is responsible for the observed increase in oil mass yield with increasing processing temperature, as well as the increase in nitrogen content of the oil. Optimization of the production of fuels and fuel precursors by HTT should be done in conjunction with evaluation of downstream processing options and/or the possibility to recycle unconverted material to the algae cultivation.