Biomass pyrolysis is a promising path toward renewable liquid fuels. However, the calorific value of the pyrolysis oil (PO), also known as bio-oil, is low due to the high content of organic oxygenates and water. The oxygen content of PO can be reduced by hydrodeoxygenation, in which hydrogen is used to remove oxygen. An economic disadvantage of hydrodeoxygenation pathway is its dependence on hydrogen as an expensive feedstock. An alternative technology is to upgrade PO in hot, high pressure water, known as hydrothermal processing. The present paper studies upgrading pyrolysis oil derived from Norwegian spruce by (1) hydrodeoxygenation in a liquid hydrocarbon solvent using nanodispersed sulphide catalysts and (2) hydrothermal treatment in near-supercritical water. Experimental results and simulation studies suggested that if water soluble products are reformed for hydrogen production, the hydrodeoxygenation pathway would be a net consumer of hydrogen, whilst the hydrothermal pathway could produce a significant hydrogen excess. By comparison, the fuel yield from hydrodeoxygenation was significantly higher than hydrothermally treated fuel. Therefore, in the present study, an integrated model was proposed which demonstrates that the synergistic integration of hydrothermal and hydrodeoxygenation upgrading technologies can yield an optimal configuration which maximises fuel production, whilst obviating the need to purchase hydrogen. In this optimal configuration, 32% of raw pyrolysis-oil is hydrothermally treated and the rest is sent for hydrodeoxygenation. The results of a techno-economic analysis suggests that if the proposed integrated approach is used, it is possible to produce biofuel (43% gasoline, and 57% diesel) at a very competitive minimum selling price of 428 $ m(-3) (1.62 $/gallon). (C) 2015 Elsevier Ltd. All rights reserved.