This study reports the synergy effect during co-pyrolysis of Hailar lignite (HL) and palm kernel shell (PKS) biomass under microwave irradiation in the temperature range of 400–600°C. The results showed that the synergy effect promoted the yields of tar and gas during co-pyrolysis experiments. Gas chromatography-mass spectrometry (GC–MS) analysis of tar showed that the formation of aliphatic hydrocarbons was promoted during co-pyrolysis of lignite and PKS biomass in expense of single-ring aromatic compounds, aliphatic carboxylic acids, alcohols, aldehydes, and ketones. The synergy effect also promoted the formation of H2 and CO during co-pyrolysis. A two-stage pyrolysis reactor was used in order to investigate the mechanism of synergy during co-pyrolysis by isolating the secondary pyrolysis reactions. The two-stage pyrolysis results showed that secondary pyrolysis reactions were mainly responsible for synergy effect, resulting in higher gas and lower tar yields as a result of secondary tar cracking. HL and PKS chars promoted the formation of aliphatic hydrocarbons, CO, and CH4 as a result of decarbonylation, decarboxylation, and demethylation reactions. Reforming of methane over HL and PKS chars led to an increase in concentrations of H2 and CO during secondary pyrolysis reactions.