Upgrading of bio-oil extracted from palm kernel shell (PKS) was performed using a lab-scale fixed-bed reactor with HZSM-5 as a catalyst. The catalytic cracking was carried out at optimized conditions: 0.3-MPa pressure, temperature of 500°C, and oil to catalyst ratio of 1:5. One of the challenges in upgrading bio-oil by catalytic cracking is deactivation of catalyst due to coke formation on catalyst surface. To overcome coke deposition, the upgrading process was carried out at 0.3-MPa pressure. Characterization of raw and upgraded bio-oil obtained through catalytic cracking was discussed in detail, indicating improvement in its physical properties. The distribution of products after cracking of bio-oil includes 58.89 wt of organic liquid product, 15.63 wt of aqueous fraction, 7.84 wt of coke, and 17.64 wt of gases. The degree of deoxygenation and calorific value of organic liquid product is 43.74 and 31.65 MJ/kg respectively. Organic liquid product obtained comprises 17.55 of hydrocarbons within the gasoline range. Hence, HZSM-5 proved its effectiveness for upgrading the bio-oil in a continuous mode. © 2016 Taylor & Francis Group, LLC.