Production of biofuels from second-generation biomass gives us an opportunity to minimise the dependence on fossil resources. Woody biomass is a valuable energy resource mainly composed of underutilized hemicellulose and lignin. The third fraction, i.e. residual cellulose from wood liquefaction is frequently used as a starting material in pulping and packaging industry. The catalytic liquefaction of woody biomass, which can be performed even without drying of feedstock to produce biocrude, is a promising route to biofuels and fine chemicals. This work emphasizes the use of heterogeneous catalysts in wood liquefaction to produce biocrude containing both phenolic compounds and sugars. The main parameters discussed are wood type, catalyst selection and reaction conditions, such as gas atmosphere, solvent, temperature, pressure and feedstock particle size. Several metals (Pd, Ru, Ni, Co, Mo, Fe) supported on active carbon, alumina and zeolites have been applied in wood liquefaction. In addition to heterogeneous catalysts, also co-catalysts, such as homogeneous acids and metal salts have been utilized to promote, in particular, lignin depolymerization. The liquid phase product distribution including sugars, phenolic monomers, dimers and oligomers over different catalysts will be discussed. Different catalytic approaches will also be elucidated. Finally, future research needs and process feasibility will also be summarized.