Bio-oil is produced by the rapid pyrolysis of biomass and is a source of renewable fuel. The increase in viscosity during storage is a major problem that can be controlled by the addition of methanol or other alcohols. The objective of this research was to determine how alcohols stabilize bio-oil by investigating the reactions of alcohols with low molecular weight aldehydes and acids. The reaction of methanol with hydroxyacetaldehyde (HA) and acetic acid to form the respective acetal or ester was catalyzed by the 7 x 10-4 M strong acids such as sulfuric, hydrochloric, p-toluene sulfonic acid, and methylsulfonic acid. HA formed 2,2-dimethoxyethanol (DME) and AT 60°C, equilibrium was reached in less than one hour. Smaller amounts of DME were formed in the absence of strong acid. HA, acetaldehyde, and propanal formed their corresponding acetals when reacted with methanol, ethanol, 1-propanol or 1-butanol. Esters of acetic acid and hydroxyacetic acid were observed from reactions with these same four alcohols. Other acetals and esters were observed by GC/MS analysis of the reaction products. The results from accelerated aging experiments at 90°C suggest that the presence of methanol slows polymerization by formation of acetals and esters from low molecular weight aldehydes and organic acids. The other objective of this study was to improve the bio-oil quality as fuel in a single step by adding methanol to the pyrolysis gases. Therefore, a methanol/sulphuric acid mixture was injected into the pyrolysis vapor zone prior to the water cooled condensers of the auger reactor. The chemical and physical properties of bio-oils were determined and the results of these tests were compared with the results of tests with raw bio-oils. The amount of methanol injection varied from 1 to 20 wt % with and without catalysts. The results showed that the addition of 10% methanol was required for stability with the accelerated aging test. The bio-oil viscosity was reduced to 11.7 cSt from 15.45 cSt with the 10% methanol addition and after 5 days of ageing at 90°C the viscosity only increased by 17% whereas raw bio-oil turned into a highly viscous phase separated material. GC/MS analysis indicated the formation of the esters and quantified the amount of methanol present in the bio-oil after the reaction. The acid value was 87 compared to 99.8 for raw bio-oil. The lower acid value of the esterified bio-oil supports the hypothesis that the formation of esters lowered the amount of free acids present. The flash point of the bio-oil was improved to 37°C and it burned intensely in the waste oil burner. A Principal component analysis supported these findings by indicating that the esterified bio-oil properties differed significantly from the raw bio-oil.