Bio-oil derived by fast pyrolysis of biomass represents a potentially attractive source of hydrocarbon transportation fuels. Raw bio-oil however is completely unsuitable for application as a fuel due primarily to high organic oxygen content, which imparts a number of undesirable properties including high acidity and low stability. These problems can be overcome by catalytic hydrodeoxygenation (HDO); however, removing oxygen to very low levels by hydrotreating carries a strong economic penalty. Mild hydrotreating (where moderate levels of deoxygenation take place) coupled with coprocessing in a petroleum refinery represents an alternative to deep hydrotreating, which may help improve the economics of manufacture of hydrocarbon transportation fuels from biomass. This study reports on the effect of reaction severity on the quality of bio-oil produced via mild hydrotreating in a semibatch reactor using conventional hydroprocessing catalysts. Detailed speciation of oxygen functional groups in distillate and bottoms products has been carried out, and the fate of organic oxygen as a function of reaction severity has been determined. The results indicate that acceptable refinery blendstocks and perhaps final fuels can be produced by mild hydrotreating.