Pyrolysis of algae from Taihu Lake water blooms for bio-oil production was conducted from 473 K to 773 K by a fractional way in six steps. Palmitic acid, agarose and egg white were used as model compounds to study the origin of bio-oil ingredients and interaction of the intermediates from the algae components. In the first step at 473 K, the bio-oil obtained was composed of n-heptadecane and some small molecule acids. Quantities of carboxylic acids (mainly palmitic acid) and some amides, hydrocarbons, esters etc. were evolved in the second step at 523 K. For the third step at 573 K, except the carboxylic acids (still mainly palmitic acid), amides, nitriles, and phenols also accounted for a large proportion whereas respectable amount of indoles and alcohol ketones were attained. The main products in the later three steps were nitriles and phenols at 623 K, hydrocarbons and phenols at 673 K, and only phenols at 773 K, respectively. A higher heating value (HHV) of 36.0 MJ/kg of the bio-oil was obtained at 673 K. The hydrocarbons, palmitic acid and esters in the bio-oil were derived from lipids. The phenols, indoles, pyrroles, small molecular acids, amides like acetamide and some nitriles like phenyl-acetonitrile were generated from proteins. Amides and nitriles were also dated from the interaction of pyrolytic intermediates of lipids and proteins. Fewer products directly from the direct pyrolysis of saccharides were detected in the algae bio-oil due to the interaction of pyrolytic intermediates of saccharides and proteins in algae, and those interactions resulted in the formation of oligomers in the bio-oil at 473 and 523 K. Whereas very weak interaction was observed between lipids and saccharides. The process of fractional pyrolysis by varying temperature provided an advisable way for improving the selectivity of bio-oil from direct pyrolysis, and made the bio-oil much more applicable in down streaming utilization.