The hydrogenation of a dichloromethane soluble fraction of flash pyrolysis oil (bio-oil, BO), obtained by treatment of BO with a water–dichloromethane solvent mixture, was investigated using a water-soluble homogeneous ruthenium catalyst (RuCl3·3H2O/tris(m-sulfonatophenyl)phosphine, TPPTS). The catalyst is active at mild conditions (<70 °C, 45 bar hydrogen) and particularly the levels of aldehydes in the BO fraction are reduced considerably. Model studies using vanillin, acetoguaiacone and iso-eugenol (45 bar hydrogen and 45–70 °C) showed that vanillin is the most reactive and unexpectedly forms creosol (6) instead of the vanillylalcohol (5). An optimisation study was performed on the latter reaction and the highest TOF (36.4 mol/(mol h)) was obtained at 60 °C, 45 bar hydrogen and a NaI concentration of 0.08 M. Kinetic studies imply that the formation of 6 proceeds via the intermediate alcohol 5 in a series type of mechanism. TEM-EDX measurements suggest that the reactions are most likely catalyzed by single metal homogeneous Ru complexes and not by Ru nanoparticles/colloids.