The disposal of kitchen waste (KW) is a wide concern because of its high moisture content, foul odor, and low energy density. Solvothermal liquefaction (STL) can directly convert KW to bio-oil without pre-drying. This study investigated the effect of iron-based catalysts (Fe, Fe2O3, and Fe3O4) and a catalytic two-step method on bio-oil production, heteroatom distributions (N and S), and pollutant decompositions during STL of KW. From the comparison of three iron-based catalysts, the catalysis of metallic Fe significantly enhanced the bio-oil yield and quality, resulting in the highest yield (52.30 %) and a high heating value (35.86 MJ/kg) of bio-oil. Meanwhile, metallic Fe noticeably increased the fraction of lighter molecules in bio-oil to 71.30 %. During the catalytic two-step method process, the nitrogen and sulfur in the raw material were primarily transferred to the aqueous phase in the form of NH4+ and SO42-. The introduction of iron-based catalysts significantly promoted the esterification and reduction reactions. The bio-oil exhibited the highest ester content (77.96 %) when Fe3O4 was present while adding metallic Fe catalyst resulted in the highest hydrocarbon content of 28.16 %. Finally, a potential reaction pathway and mechanism of the catalytic STL of KW were proposed and discussed comprehensively. This study validates the use of iron-based catalysts and a two-step method to improve the yield and quality of bio-oil. This method reduces heteroatom content through associated hydrogenation and reduction reactions, demonstrating its potential for upgrading bio-oil into high-quality fuel.