A route for directional conversion of bio-oil into phenol by means of coupling the catalytic cracking of the bio-oil with the hydroxylation of the bio-oil-based benzene-rich aromatics is proposed. High selectivity for phenol in the resulting organic liquid was achieved, with an almost complete conversion of the bio-oil. Co-cracking of the bio-oil with methanol over a Zn-modified zeolite significantly enhanced the yields of aromatics and decreased the deactivation of the catalyst during the catalytic cracking of the bio-oil. The phenol yield depended on the metal oxide catalysts, the temperature, and the reaction time during hydroxylation of the benzene-rich aromatics. The reaction pathway of converting bio-oil into phenol was elucidated based on the products identified and the characterization of the catalysts.