A better approach for biomass conversion is the integrated hydropyrolysis and hydro­conversion of biomass to directly produce fungible gasoline and diesel fuel or blending components is carried out in two integrated stage. The first stage is a medium pressure, catalytically assisted, fast hydropyrolysis step completed in a fluid bed under moderate hydrogen pressure. Vapors from the first stage pass directly to a second-stage hydro­conversion step where a hydrodeoxygenation catalyst removes all remaining oxygen and produces gasoline and diesel boiling range material. All the process steps are completed at essentially the same pressure, so that compression costs are minimized. A unique feature of this process is that all the hydrogen required for this process is produced by reforming the Ci—C3 hydrocarbons, so no additional hydrogen is required. Pyrolysis is carried out in the presence of hydrogen at high pressure. The advantage of hydropyrolysis is the high quality of the products at the maximum liquid yield. The disadvantage is the high hydrogen consumption, which leads to high processing costs, but this is only a short-term economic consideration. If the H2 from a carbon-free source becomes cost competitive, the hydropyrolysis can become commercially exploitable technique for the conversion of ligno — cellulosic biomass with complete utilization of carbon content (Agrawal and Singh, 2009; Marker et al., 2009).