Hydrothermal liquefaction (HTL) is a thermal depolymerization process used to convert wet biomass, and other macromolecules, into crude-like oil under moderate temperature and high pressure. The crude-like oil has high energy density with a lower heating value of 33.8-36.9 MJ/kg and 5-20 wt% oxygen and renewable chemicals. The process has also been called hydrous pyrolysis.

The reaction usually involves homogeneous and/or heterogeneous catalysts to improve the quality of products and yields. Carbon and hydrogen of an organic material, such as biomass, peat or low-ranked coals (lignite) are thermo-chemically converted into hydrophobic compounds with low viscosity and high solubility. Depending on the processing conditions, the fuel can be used as produced for heavy engines, including marine and rail or upgraded to transportation fuels, such as diesel, gasoline or jet-fuels.

The process may be significant in the creation of fossil fuels. Simple heating without water, anhydrous pyrolysis has long been considered to take place naturally during the catagenesis of kerogens to fossil fuels. In recent decades it has been found that water under pressure causes more efficient breakdown of kerogens at lower temperatures than without it. The carbon isotope ratio of natural gas also suggests that hydrogen from water has been added during creation of the gas.