This contribution focuses on one-step hydrogenation-esterification (OHE) of furfural and acetic acid, which are difficult to treat and typically present in crude bio-oil, as a model reaction for bio-oil upgrading. A bifunctional catalyst is needed for OHE reaction. Among tested bifunctional catalysts, the 5%Pd/Al(2)(SiO(3))(3) shows the best catalytic performance. Compared to the physical mixture of 5%Pd/C + Al(2)(SiO(3))(3), there is a synergistic effect between metal sites and acid sites over 5%Pd/Al(2)(SiO(3))(3) for the OHE reaction. A moderate reaction condition would be required to obtain high yields of alcohol and ester along with lower byproduct yields. In this work, the optimum selectivity to desired products (alcohol and ester) of 66.4% is obtained, where the conversion of furfural is 56.9%. Other components, typically present in bio-oils, have little effects on the OHE of FAL and HAc. This OHE method is a promising route for efficient upgrading of bio-oil. (C) 2011 Elsevier Ltd. All rights reserved.