The objective of this study was to synthesize carbon-encapsulated bimetallic Co–Mo carbides and sulfides nanoparticles by carbothermal reduction (CR) of molybdenum-promoted biochar and post sulfiding. The bimetallic Co–Mo carbides and sulfides nanoparticles were characterized for physicochemical properties by multiple morphological and structural methods (e.g., SEM, TEM, and XRD). These nanoparticles were tested for catalytic upgrading of the pyrolysis bio-oil from pinewood in a continuous packed-bed reactor. Hydroprocessing experiments were performed at a temperature of 350–425°C, 6.89–12.41 MPa (1,000–1,800 psig) hydrogen pressure with a hydrogen flow rate of 500 ml/min at a liquid hourly space velocity of 0.1–1.0 h−1. The results from sulfided catalytic experiments were compared with CoMo carbide nanoparticles. Sulfided CoMo nanoparticles demonstrated higher catalytic activity and resulted in increased hydrocarbon fraction yields. Moreover, the quality of the hydrocarbon fraction, as determined by the acid value, higher heating value, and water content analyses, also improved.