Hydrogenolysis of biomass in pressurized hot water leads to high conversions and high oil yields, when CO/base or formate is used as a reducing and deoxygenating agent instead of molecular hydrogen. At 573 K, the formation of hydrogen is very low, allowing an efficient utilization of the formate species in the hydrogenolysis process. From sugarcane bagasse or hydrolytic lignin, oil yields exceeding 65% are obtained. From cellulose, oil yields of 40 to 50% are often achieved. In addition to oils, CO2 and water are also formed as major products. The oils contain typically 15 to 20% oxygen, and thus need further upgrading to be used as liquid fuels. In this chapter, the mechanisms proposed for the single role of pressurized hot water in combination with formate species in biomass liquefaction are discussed in detail.