Hydrothermal processing of high lipid feedstock such as microalgae is an alternative method of oil extraction which has obvious benefits for high moisture containing biomass. A range of microalgae and lipids extracted from terrestrial oil seed have been processed at 350 °C, at pressures of 150-200 bar in water. Hydrothermal liquefaction is shown to convert the triglycerides to fatty acids and alkanes in the presence of certain heterogeneous catalysts. This investigation has compared the composition of lipids and free fatty acids from solvent extraction to those from hydrothermal processing. The initial decomposition products include free fatty acids and glycerol, and the potential for de-oxygenation using heterogeneous catalysts has been investigated. The results indicate that the bio-crude yields from the liquefaction of microalgae were increased slightly with the use of heterogeneous catalysts but the higher heating value (HHV) and the level of de-oxygenation increased, by up to 10%.