A two-step sequential hydrothermal liquefaction (SEQHTL) model for simultaneous extraction of polysaccharide at the first step followed by bio-oil in the second was established. The effects of reaction temperature, residence time, and biomass/water ratio on the product distribution of each SEQHTL step were evaluated. Maximum yield (32 wt.%) of polysaccharides was obtained at 160 degrees C, 20 min and 1:9 biomass/water ratio. Considering the operation cost and bio-oil yield (> 30%); 240 degrees C, 20 min and 1:9 biomass/water ratio was preferred as ideal SEQHTL condition for bio-oil extraction. SEQHTL always produced similar to 5% more bio-oil and similar to 50% less bio-char than direct hydrothermal liquefaction (DHTL). Free fatty acid content of the bio-oils exhibited a sharp decrease with increase in temperature. Comparative analysis of the energy input and net energy balance showed that SEQHTL requires similar to 15% less MJ/kg bio-oil than DHTL. Energy recovery rate for SEQHTL is nearly, 4% higher than the DHTL. Published by Elsevier Ltd.