Pd/NbOPO4 multifunctional catalyst was prepared and used for catalytic hydrotreatment upgrading of bio-oil, which was obtained from low-temperature torrefaction (LTT) of pubescens and contained mainly lignin oligomers. The upgrading temperatures were investigated at 220–280 °C. Pd/NbOPO4 exhibited good performance for the effective depolymerization of oligomers with increasing temperature. It was revealed that both Brönsted acid sites and Lewis acid sites existed on NbOx, which contributed to the cleavage of the C–O–C bond. Furthermore, esterification, hydrogenation, and O-alkylation of monomeric derivatives also occurred simultaneously during the depolymerization process. After hydrotreatment upgrading, the average molecular weight of bio-oil decreased from Mw = 320 Da (Mn = 298 Da) to Mw = 273 Da (Mn = 254 Da) and the bio-oil quality was improved dramatically. The oxygen content decreased from 29.53 to 9.78 wt %. The upgraded bio-oil obtained at 280 °C had a heating value of 40.48 MJ kg–1, which was much higher than that of the original bio-oil (26.96 MJ kg–1).