This article provides an overview of previous research contributions and the current status of technology on the hydrothermal liquefaction (HTL) of wood biomass into liquid fuels and valuable chemicals. This process involves the direct liquefaction of biomass, which operates from 200 degrees C to 400 degrees C, 5 to 25 MPa, and 10 to 60 min reaction time in hot-compressed water or solvent and with or without a catalyst in the presence of inert or reducing gas. The influence of process variables, including biomass composition, temperature, residence time, pressure, heating rate, particle size, catalysts, and so on, which are significant for the bio-oil yield and product quality, has been addressed in this review. This review focuses on the HTL fundamentals based on current knowledge and summarizes the state-of-the-art knowledge of the HTL of wood biomass.