Production of liquid fuels from biomass via pyrolysis has attracted increasing interest in the past decades. However, its industrial application has been inhibited due to the complicated compositions and inferior properties of bio-oil. Therefore, appropriate upgrading methods are in urgent need to realize high-grade utilization of bio-oil. Direct upgrading of crude bio-oil faces severe coking problems, which requires pre-separation process prior to upgrading. Molecular distillation technology can efficiently separate thermo-sensitive bio-oil into different fractions. Thus, an innovative strategy for graded upgrading of bio-oil has been proposed based on the molecular distillation. The distilled fractions rich in ketones and acids are recommended to be upgraded by a hydrogenation-cocracking process to produce bio-gasoline. In this process the modification of catalysts and the optimization of reaction conditions are the key issues. As for the upgrading of residual fractions, a scheme of multi-step separation can be employed to extract value-added chemicals. Moreover, high-value utilization of pyrolysis byproducts, including biochar and biogas, can also be achieved to improve the overall efficiency and economy of biomass pyrolysis process. With activation and surface modification methods, biochar can be transformed to promising materials for the application of catalysts and electrochemistry materials due to its high surface area and plenty of functional groups. Biogas, a composite gas consisting of CO, H2, CO2 and volatile hydrocarbons, can be converted into alternative fuels including alcohols and hydrocarbons over optimized catalysts .