AbstractWhile the intention of slow pyrolysis is to produce mainly charcoal, fast pyrolysis is meant to convert biomass to a maximum quantity of liquids (bio‐oil). Both processes have in common that the biomass feedstock is densified to reduce storage space and transport costs. A comfortable, more stable and cleaner intermediate energy carrier is obtained, which is much more uniform and well defined. In this review, the principles of fast pyrolysis are discussed, and the main technologies reviewed (demo scale: fluid bed, rotating cone and vacuum pyrolysis; pilot plant: ablative and twin screw pyrolysis). Possible product applications are discussed in relation to the bio‐oil properties. General mass and energy balance are provided as well, together with some remarks on the economics. Challenges for the coming years are (1) improvement of the reliability of pyrolysis reactors and processes; (2) the demonstration of the oil's utilization in boilers, engines and turbines; and (3) the development of technologies for the production of chemicals and biofuels from pyrolysis oils. One important conclusion in relation to biofuel production is that the type of oxygen functionalities (viz. as an alcohol, ketone, aldehyde, ether, or ester) in the oil should be controlled, rather then merely focusing on a reduction of just the oxygen content itself. Copyright © 2010 Society of Chemical Industry and John Wiley & Sons, Ltd