Mallee biomass is an important renewable energy source for the future sustainable energy supply in Western Australia. Embedded in mallee leaf, 1,8-cineole is a value-added product that can be extracted for further improving the economic performance of an envisaged mallee-based biomass supply chain. This study reports the steam extraction of 1,8-cineole from mallee leaf for 1–180 min and its effect on the fuel properties of the spent biomass. The experimental results show that in the first 15 min, steam distillation extracts ∼90% of 1,8-cineole rapidly and the extraction follows zero-order kinetics, regulated by the rate of latent heat (provided by steam) for 1,8-cineole evaporation. After 15 min, extraction is slow and follows first-order kinetics, controlled by the slow internal diffusion of the residual 1,8-cineole. Overall, 1,8-cineole extraction virtually completed after steam distillation for 60 min. Steam distillation leads to little changes in the proximate and ultimate analyses and hence mass energy density of the spent leaf. However, it removes some total organic carbon and significant amount of Mg, Ca, and Cl in the spent leaf via interactions between the leaf and the steam (and/or reflux). It has also changed the chemical association of Mg and Ca with the chemical structure of organic matter in the spent leaf.