BACKGROUND: Light olefins are the basic feedstocks for the petrochemical industry. So far, the olefins yield from bio-oil is noticeably lower than that from methanol, ethanol and naphtha, and thereby needs to be improved by optimizing catalysts and cracking conditions. The main purpose of this work is to selectively produce light olefins through the catalytic cracking of bio-oil using the magnesium modified HZSM-5 catalyst. RESULTS: Catalytic conversion of bio-oil and its model compounds into light olefins was performed using the Mg/HZSM-5 catalyst. The highest olefins yield from bio-oil was 0.25 kg olefins (kg(-1) bio-oil) with a carbon yield of 59.3 C-mol% and nearly complete bio-oil conversion. The reaction conditions and addition of magnesium into the HZSM-5 zeolite can be used to control both olefins yield and selectivity. In addition, the yield of light olefins from the pyrolysis of bio-oil is much lower than the level from bio-oil catalytic cracking. CONCLUSION: Moderately increasing the medium acid sites through addition of Mg into the zeolite effectively enhanced olefins selectivity and improved catalyst stability. The production of light olefins from bio-oil is closely associated with the chemical composition and hydrogen to carbon effective ratios of feedstock. (C) 2012 Society of Chemical Industry