This review provides insights into the current research on pyrolytic bio-oil obtained from different feedstock regarding upgrading techniques and applications such as energy, fuels, chemicals, and carbon materials. Raw bio-oil is not appropriate for transportation and ignition due to undesired properties; therefore, several challenges have been reported regarding its suitable market application. For liquid biofuel production, thermochemical pathways, particularly hydrogenation and deoxygenation, must be carried out, and for chemical production, liquid solvents are mostly used via physical separation. The main issues related to downstream processes with environmental and economic assessment are also covered. The analysis indicates that the major bottlenecks for commercial applications of upgraded bio-oil are the initial stage (upgrading techniques), high production costs, and pilot scale production. Finally, future directions are addressed for the improvement of bio-oil upgrading.