Catalytic conversion of volatiles from biomass pyrolysis over biochar and its mechanism are important to the efficient utilization. The properties of biochar including alkali/alkaline earth metallic species (AAEMs) and pore structure exert the influence on bio-oil quality. In this work, a facile demineralization method by CO2-enhanced water leaching (CEWL) of biochar from bagasse pyrolysis was first applied to catalytic upgrading of pyrolysis bio-oil. The effect of AAEMs content and pore structures in biochar catalysts on upgrading performances was investigated. The results show that the CEWL of biochar can effectively remove most inherent AAEMs without obviously destroying pore structures. Pore structure of catalysts plays a dominant role in increasing phenols contents to 47.7% over CO2-activated biochar from 25.8% without biochar. The reaction mechanism was proposed that AAEMs enhanced the polymerization of aromatic hydrocarbons and the decarbonylation of the oxygenated compounds. High temperature is profitable to the generation of phenols and polycyclic aromatic hydrocarbons owing to easier decarbonylation of ketones and demethylation or demethoxylation of phenols.