MoS2 was prepared by a hydrothermal method and then applied into the hydrodeoxygenation (HDO) of p-cresol as a model compound for bio-oil to study the effects of water and benzothiophene on the conversion, product distribution and stability in detail. The presence of water enhanced the HDO activity and decreased the hydrogen consumption: the deoxygenation degree and toluene selectivity reached to 97.0% and 88.0%, respectively. When water was replaced by benzothiophene, p-cresol conversion increased to 92.3% with toluene selectivity of 72.4%. With water and benzothiophene simultaneously introduced, at 275 degrees C and 4.0 MPa, the conversion and toluene selectivity were 86.0% and 79.1%, respectively. The reaction temperature and hydrogen pressure were also significant factors. The conversion was raised to 97.4% with toluene selectivity of 80.1% when the reaction temperature increased to 300 degrees C, but decreased to 71.7% with toluene selectivity of 77.2% when hydrogen pressure increased to 5.0 MPa. The characterization results of the spent catalysts indicated that some defects in the (0 0 2) plane of MoS2 caused by the loss of sulfur were observed after the HDO reaction, which resulted in its deactivation. This deactivation was accelerated by adding water but inhibited by adding benzothiophene.