Biomass can be utilized to produce bio-oil, a promising alternative energy source for the limited crude oil. There are mainly two processes involved in the conversion of biomass to bio-oil: flash pyrolysis and hydrothermal liquefaction. The cost of bio-oil production from biomass is relatively high based on current technologies, and the main challenges are the low yield and poor bio-oil quality. Considerable research efforts have been made to improve the bio-oil production from biomass. Scientific and technical developments towards improving bio-oil yield and quality to date are reviewed, with an emphasis on bio-oil upgrading research. Furthermore, the article covers some major issues that associated with bio-oil from biomass, which includes bio-oil basics (e.g., characteristics, chemistry), application, environmental and economic assessment. It also points out barriers to achieving improvements in the future. (c) 2012 Elsevier Ltd. All rights reserved.