A new process for direct conversion of either levulinic acid (LA) or y-valerolactone (GVL) to hydrocarbon fuel precursors was studied. The process involves passing an aqueous solution of LA or GVL containing a reducing agent, such as ethylene glycol or formic acid, over a ketonization catalyst at 380-400 degrees C and atmospheric pressure to form a biphasic liquid product. The organic phase is significantly oligomerized and deoxygenated and comprises a complex mixture of open-chain alkanes and olefins, aromatics, and low concentrations of ketones, alcohols, ethers, and carboxylates or lactones. Carbon content in the aqueous phase decreases with decreasing feed rate; the aqueous phase can be reprocessed through the same catalyst to form additional organic oils to improve carbon yield. Catalysts are readily regenerated to restore initial activity. The process might be valuable in converting cellulosics to biorenewable gasoline, jet, and diesel fuels as a means to decrease petroleum use and decrease greenhouse gas emissions.