In situ upgrading of biomass pyrolysis vapours over Na2CO3/γ-Al2O3 catalysts was studied in a laboratory-scale fixed-bed reactor at 500 °C. Catalytic oil exhibits a significant improvement over its non-catalytic counterpart, such as lower oxygen content (12.3 wt % compared to 42.1 wt %), higher energy density (37.0 compared to 19.0 MJ kg−1) and lower acidity. A study using thermogravimetry–mass spectrometry analysis and 23Na and 1H magic-angle spinning NMR techniques has revealed the formation of a new sodium species in the catalyst, which is responsible for the high catalytic activity. This species is proposed to be formed by the coordination of Na+ ions and the hydroxyl groups on the surface of γ-Al2O3. Regeneration of the catalyst was performed in air at 600 °C and the regenerated material displays lower activity towards deoxygenation than the fresh catalyst. This deactivation is likely attributed to the change in the active sodium species during regeneration.