During catalytic upgrading over HZSM-5 of vapors from fast pyrolysis of biomass (ex situ CFP), water reacts with aromatic intermediates to form phenols that are then desorbed from the catalyst micropores and produced as products. We observe this reaction using real time measurement of products from neat CFP and with added steam. The reaction is confirmed when 18 O-labeled water is used as the steam source and the labeled oxygen is identified in the phenol products. Furthermore, phenols are observed when cellulose pyrolysis vapors are reacted over the HZSM-5 catalyst in steam. This suggests that the phenols do not only arise from phenolic products formed during the pyrolysis of the lignin component of biomass; phenols are also formed by reaction of water molecules with aromatic intermediates formed during the transformation of all of the pyrolysis products. Water formation during biomass pyrolysis is involved in this reaction and leads to the common observation of phenols in products from neat CFP. Steam also reduces the formation of non-reactive carbon in the zeolite catalysts and decreases the rate of deactivation and the amount of measured "coke" on the catalyst. These CFP results were obtained in a flow microreactor coupled to a molecular beam mass spectrometer (MBMS), which allowed for real-time measurement of products and facilitated determination of the impact of steam during catalytic upgrading, complemented by a tandem micropyrolyzer connected to a GCMS for identification of the products.