Chinese herb residue waste, characterized by its high moisture content and concentrated emissions, shares a similar chemical constitution with common lignocellulosic biomass. Therefore, it can be effectively converted into biofuel through hydrothermal liquefaction. In this study, the impact of temperature (300-360 °C), reaction time (0-60 min), and solid-liquid ratio (1:5/1:10/1:15) on the distribution of Chinese herb residue conversion products was investigated. The highest HHV achieved was 25.964 MJ/kg with a bio-oil yield of 24.57 wt.% under the experimental conditions of temperature at 330 °C for 15 min and a solid-liquid ratio of 1:10. A series of metal-loaded catalysts, Fe/MCM-41, Ni/MCM-41, and Co/MCM-41, were prepared by the impregnation method for the catalytic hydrothermal liquefaction of Chinese herb residue, and the bio-oil products were analyzed by EA, GC-MS and FT-IR. Higher bio-oil yields were obtained for the monometallic catalysts, Fe/MCM-41 (26.15 wt.%), Ni/MCM-41 (26.2 wt.%), and Co/MCM-41 (27.05 wt.%), respectively. The bimetallic catalysts showed the highest conversion of Fe-Ni/MCM-41 (84.7%) > Fe/MCM-41 (82.9%) > Fe-Co/MCM-41 (82.1%), respectively. The highest HHV of 32 MJ/kg was achieved using Ni/MCM-41 catalyst. GC-MS analysis revealed that the major constituents of bio-oil included phenols, ketones, acids, and esters. The bio-oil obtained using Fe/MCM-41 catalyst exhibited the highest relative contents of phenols and ketones at 44.13% and 24.5%. These findings demonstrate that temperature and catalyst selection play crucial roles in influencing the yield of bio-oil, as well as its chemical composition. Furthermore, the deoxidation and hydrogenation reactions were significantly enhanced by the transition metal-supported molecular sieve catalyst, leading to a notable increase in the HHV.