Thermal conversion of biomass via pyrolysis, torrefaction, or liquefaction is an attractive process with significant economic potential. The main challenge of this technology is the upgrading of the intermediate liquid product (bio-oil) due to its complex composition. The components of bio-oil can be divided into light aqueous soluble oxygenates, furanics, phenolics, sugars and anhydrosugars, and larger oligomers. Since any single upgrading approach can only target the conversion of one or two families of compounds a combination of separation and conversion is necessary. A number of fundamental studies with model compounds have been done in the last few years and important concepts about reaction mechanisms and nature of active catalysts have been developed. Unfortunately, the complexity of bio-oil has hampered the impact of these fundamental studies on the practical applications. It is an important challenge to predict how each compound or family of compounds will behave over a catalyst in the presence of other families, when the entire mixture is fed. It is important to take into account that catalysts may quickly deactivate if the entire bio-oil is present, even when they were effective in the presence of a more pure stream. This knowledge should help guide the separation to evaluate the most effective catalytic upgrading strategies. The present review highlights recent advancements made with the conversion of model compounds present in bio-oil, as well as strategies to combine this knowledge with separation advancements in an effort to increase the amount of carbon in the biomass that can be economically converted to fuels and chemicals. (C) 2014 Elsevier B.V. All rights reserved.