Although the preparation of bio-oil with hydrothermal liquefaction shows the potential for sustainable development, both the, yield and quality were low which greatly hindered its application. Hence, a novel approach was proposed herein to improve the yield and quality of bio-oil. The production of bio-oil from poplar sawdust under direct/stepwise hydrothermal liquefaction (HTL) with Na2CO3 or Na2CO3/Fe as catalyst was investigated. The results showed that the carbon content in heavy oil (HO) gradually increased as the liquefaction temperature increased in the stepwise HTL, while the oxygen in light oil (LO) kept decreasing. The highest total bio-oil yield of 57.09% was obtained from the stepwise Na2CO3/Fe-catalyzed HTL with a residence time of 20 min. Via GC-MS analysis, it was found that the Na2CO3 catalyzed stepwise HTL dramatically improved the yield of dibutyl phthalate. However, Na2CO3/Fe catalyzed HTL helped promote the production of phthalic acid, butyl 2-ethylhexyl ester and phthalic acid, diisobutyl ester.