Utilization of waste lignocellulosic biomass to produce high-quality fuels with renewable carbon content using existing refinery infrastructure is an important step towards carbon neutrality. Direct hydroprocessing of pyrolysis bio-oil to liquid biofuels is technically challenging due to its wide fractional and complex chemical composition that requires harsh reaction conditions associated with extensive biocarbon loss to the gaseous products. We have proposed a novel bio-oil hydroprocessing strategy based on 1) bio-oil hydrotreatment (stabilization), 2) fractionation of the stabilized bio-oil and 3) co-processing of the fractions in appropriate refinery processes. In this work, we focus on the co-processing of the stabilized bio-oil distillation residue (SBDR, b.p. 360+°C) with vacuum gas-oil (VGO) in a hydrocracking fixed bed reactor under conventional conditions. This allowed us to maximize biogenic carbon content (92%) in the liquid transportation fuels as confirmed by the distribution of 14C (obtained by Accelerator Mass Spectrometry) into the corresponding fractions. i.e. gases, naphtha, kerosene, diesel and distillation residue. Reduction of the fossil CO2 emission was 3 times higher for the naphtha fraction compared with E10 gasoline; 2.4 times higher for the diesel fraction compared with B7 diesel (7 vol% FAME). Detailed analysis of the products via GC × GC-TOFMS, 13C NMR, and FTIR together with the standardized methods demonstrated that fuel distillates met requirements for conventional fuels with only negligible effect of the SBDR on physicochemical properties of products and catalyst stability. This shows that the co-hydrocracking of SBDR is a suitable process to maximize liquid fuel production with increased biogenic carbon content.