We carried out catalytic hydrothermal liquefaction of Nannochloropsis sp. at 350 degrees C in a two-chamber batch reactor that physically separated the 5% Pt/C catalyst from the algae and any solid material by a porous metal frit. This two-chamber arrangement provided a higher biocrude yield, a gaseous product richer in hydrocarbons, a biocrude with a larger "light" (hexane-soluble) portion, and a larger portion of biocrude consisting of small molecules than did an equivalent system where algae and catalyst were in physical contact. At the temperature investigated, a longer reaction time reduced the nitrogen and oxygen content in the biocrude, as has been observed in previous studies. Taken collectively, these results demonstrate that physically separating the heterogeneous catalyst and the biomass improves the catalytic hydrothermal liquefaction of microalgae, likely by more effectively doing the separate tasks of biomass liquefaction and biocrude upgrading in a single vessel.