In this chapter, the current state of the art for hydrothermal liquefaction (HTL) of lignocellulosic biomass is discussed in detail. Lignocellulosic biomass is a promising alternative to fossil fuels for the production of energy and chemicals due to its sustainability and abundance. In recent decades, extensive research has been applied to various thermochemical technologies to convert lignocellulosic biomass into value-added products. Among different technologies, HTL is considered to be one of the most effective methods for producing biofuels and bio-based chemicals from lignocellulosic biomass. The primary by-products of the HTL process include (1) biooil, (2) biochar, (3) gas, and (4) aqueous crude. Currently, only a few HTL processes have been expanded from laboratory to industrial scale. The status of the studies on the HTL of lignocellulosic biomass is critically reviewed in this chapter. In particular, the effect of HTL on the biooil production from biomass has been discussed briefly.