The massive consumption of fossil fuels and associated environmental issues are leading to an increased interest in alternative resources such as biofuels. The renewable biofuels can be upgraded from bio-oils that are derived from biomass pyrolysis. Catalytic cracking and hydrodeoxygenation (HDO) are two of the most promising bio-oil upgrading processes for biofuel production. Heterogeneous catalysts are essential for upgrading bio-oil into hydrocarbon biofuel. Although advances have been achieved, the deactivation and regeneration of catalysts still remains a challenge. This review focuses on the current progress and challenges of heterogeneous catalyst application, deactivation, and regeneration. The technologies of catalysts deactivation, reduction, and regeneration for improving catalyst activity and stability are discussed. Some suggestions for future research including catalyst mechanism, catalyst development, process integration, and biomass modification for the production of hydrocarbon biofuels are provided.