A flowsheet for the production of the substitutable transportation fuel dimethyl ether through biomass steam gasification to fuel (BSGtF) was constructed including heat integration. A quasi-equilibrium model was applied to simulate the whole process based on rigorous thermodynamic property prediction models. The carbon and hydrogen flows of the process showed that the atom utilization efficiency of carbon from the biomass to fuel process was 38.47%, and 39.75% of the total hydrogen was converted to the fuel product. The exergy flows of the total process and the exergy loss taking place in each process section were calculated based on the second law of thermodynamics. The results indicated that the total energy and exergy efficiencies from biomass to fuel were 51.3% and 43.5%, respectively, with a negative CO2 emission effect. The effects of gasification temperature, combustion temperature, and steam/biomass ratio on the gasification performance were investigated. The causes of exergy losses were analyzed to identify the areas of improvement so that a high energy utilization efficiency could be achieved.