Bio-oil is a liquid product produced from the pyrolysis of renewable biomass, and the potential application of bio-oil as liquid fuel attracts great interest. However, bio-oil has to be upgraded via processes like hydrodeoxygenation to remove the abundance of oxygen that makes bio-oil high acidity, low stability, low heating value, etc. Up to now, numerous efforts have been devoted to upgrading bio-oil through development of catalysts, reactors, processes, etc. One of the key criteria for assessing the feasibility of the previous trials is the specification of biofuel generated. Hence, this review mainly discusses the features of biofuels produced from different biomass feedstocks. The aim was to try to understand the nature of the biofuel from varied biomass feedstocks (i.e., woody biomass, grass, algae, etc.) and the associated issues in the hydrotreatment process. The environmental impact and economic analysis of the production of biofuel from different types of biomass are also discussed.