Bio-oil was added as a substitute for phenol for the preparation of a foaming phenolic resin (PR), which aimed to reduce the brittleness and pulverization of phenolic foam (PF). The components of bio-oil, the chemical structure of bio-oil phenolic resin (BPR), and the mechanical performances, and the morphological and thermal properties of bio-oil phenolic foam (BPF) were investigated. The bio-oil contained a number of phenols and abundant substances with long-chain alkanes. The peaks of OH groups, CH2 groups, C=O groups, and aromatic skeletal vibration on the Fourier transform infrared (FT-IR) spectrum became wider and sharper after adding bio-oil. These suggested that the bio-oil could partially replace phenol to prepare resin and had great potential for toughening resin. When the substitute rate of bio-oil to phenol (B/P substitute rate) was between 10% and 20%, the cell sizes of BPFs were smaller and more uniform than those of PF. The compressive strength and flexural strength of BPFs with a 10–20% B/P substitute rate increased by 10.5–47.4% and 25.0–50.5% respectively, and their pulverization ratios decreased by 14.5–38.6% in comparison to PF. All BPFs maintained good flame-retardant properties, thermal stability, and thermal isolation, although the limited oxygen index (LOI) and residual masses by thermogravimetric (TG) analysis of BPFs were lower and the thermal conducticity was slightly greater than those of PF. This indicated that the bio-oil could be used as a renewable toughening agent for PF.