A new method to convert biomass to valuable chemicals and fuels has been investigated. Empty fruit bunch (EFB) was chemically and biologically pre-treated to enhance the quality of biofuel and reduce undesired components such as alcohols, ketones and nitrogenated compounds. For chemical pre-treatment, product analysis indicated bio-oil contained mixtures of esters at 21 wt% yield and acids at 42 wt% yield with minimal phenolic compounds. Meanwhile in biological pre-treatment, lignin peroxidase (LiP) enzyme was the powerful oxidant compared to MnP enzyme with 71.69% of lignin was degraded by LiP enzyme and 67.94% from manganese peroxidase (MnP) enzyme. Treated EFB produced higher conversion and liquid oil yield. Further oil up-grading has improved the heating value and reduced water content, thus the bio-oil can be conveniently processed for further use. This new method provides an alternative technique for producing important chemicals and fuels from biomass.