The hydrodeoxygenation (HDO) reaction provides a promising catalytic strategy to remove oxygen in biomass-derived bio-oil to produce renewable transportation fuels and value-added chemicals. The development of highly efficient and stable HDO catalysts plays an essential role in biomass valorization. Metal-zeolite bifunctional catalysts have been well-developed as the effective HDO catalysts in upgrading lignin-derived phenolics due to their excellent activity, selectivity, and thermal and hydrothermal stability. However, clarifying the roles of the active sites and their synergistic effect, and establishing effective structure-performance relationships in the HDO process still face challenges. In this review, we first survey the conventional catalysts applied in the HDO of bio-oil, followed by thoroughly discussing the roles of metal centers, acid sites, supports, and their impacts on the HDO process of phenolic model compounds or bio-oil. Finally, a discussion on the stability and deactivation of metal-zeolite catalysts, especially in the aqueous-phase HDO reaction, is provided. This critical review offers new insights into the development of state-of-the-art metal-zeolite bifunctional catalysts with well-defined porosity and metal-acid properties for viable biomass valorization.