Lignin is produced as a by-product in kraft and bioethanol production processes as well as in the pulp and paper industry. Convensionally, most of it is burned for heat energy recovery, and only about 2% of it is utilized as a useful chemical synthesis. Recently, research has been actively conducted worldwide to replace various phenolic compounds produced in the existing petrochemical industry with lignin degradation products that are environment friendly. Under the subcritical condition (35 0â, 2 hr, H2: 1 MPa), lignin was decomposed and converted to bio-oil in the presence of red-mud (RM) and activated red-mud (ARM) catalysts. In particular, when red mud was used as a catalyst, the HHV was increased by 11.45 MJ/kg compare to the Kraft lignin, while carbon (C) and hydrogen (H) contents were increased by 17.99% and 1.87% respectively. Moreover, the yield of bio oil was increased by 8% (with RM catalyst) and 1.8% (with ARM catalyst) compare to the control experiment. GC-MS results showed that the produced bio-oil was comprised of cetechol and guaiacol type monomers as the major compounds. The overall results suggested that the red mud catalyst increased the bio oil yield, high heating value (HHV), and catechol production during the lignin decomposition technique. Key words: Lignin, Hydrothermal Liquefaction, Subcritical Water, Aromatic Compound, Redmud