A two-step sequential hydrothermal liquefaction (SEQHTL) model for simultaneous extraction of polysaccharide at the first step followed by bio-oil in the second was established. The effects of reaction temperature, residence time, and biomass/water ratio on the product distribution of each SEQHTL step were evaluated. Maximum yield (32wt.%) of polysaccharides was obtained at 160°C, 20min and 1:9 biomass/water ratio. Considering the operation cost and bio-oil yield (>30%); 240°C, 20min and 1:9 biomass/water ratio was preferred as ideal SEQHTL condition for bio-oil extraction. SEQHTL always produced ∼5% more bio-oil and ∼50% less bio-char than direct hydrothermal liquefaction (DHTL). Free fatty acid content of the bio-oils exhibited a sharp decrease with increase in temperature. Comparative analysis of the energy input and net energy balance showed that SEQHTL requires ∼15% less MJ/kg bio-oil than DHTL. Energy recovery rate for SEQHTL is nearly 4% higher than the DHTL.