In this study, we report catalytic fast pyrolysis of biomass using multifunctional hybrid spinel‐oxide@zeolite catalysts prepared by using the steam‐assisted crystallization (SAC) method to create the mesoporous zeolite followed by urea hydrolysis of metal nitrates to deposit spinel‐oxides. This hybrid catalyst was quite effective in the deoxygenation of pinewood sawdust pyrolysis vapours, while avoiding over cracking of the lignin precursors, which are already ideal as chemical and fuel precursors. In the first step, multiple spinel oxides MgB2O4 (where B=Fe, Al, Ce, Ga, Cr) were screened as catalysts for the pyrolysis of pinewood sawdust and the resultant bio‐oil (bio‐oil on the water‐free basis) was assessed in terms of carbon efficiency, oxygen content and chemical composition. While all the tested spinel oxides deoxygenated the pyrolysis vapour, MgAl2O4 and MgFe2O4 were found to provide a well‐balanced deoxygenation degree and producing bio‐oil with acceptable carbon efficiency. Catalytic activity and product distribution were affected by the density and strength of the acid sites of the spinel oxides. Subsequently, CFP over MgFe2O4@ZSM5 and MgAl2O4@ZSM5 was investigated under similar condition. The better performance of the hybrid catalyst was attributed to the deposition of small particles of MgFe2O4 in the external surface of the zeolite. The presence of this spinel oxide on the external surface depolymerized bulky oxygenates to lighter fractions that could easily access the active sites within the mesoporous structure of the zeolite, thus providing the catalytic function needed for the oxygen removal after aromatic ring saturation.