Product distributions in bio-crude, aqueous phase, and solid residue were rigorously analyzed during the hydrothermal liquefaction (HTL) of Chlorella sp. KR1 in order to optimize utilization of energy and chemicals. A non-asphaltene (paraffinic) fraction in the bio-crude, which can be readily upgraded to high-quality fuels via a subsequent catalytic process, was mainly produced due to lipid extraction. Above 170 °C, lipid extraction was almost complete, and hence, the non-asphaltene content did not increase further with increasing temperature. Carbohydrates could be extracted, mainly as polysaccharides, in the aqueous phase at mild temperatures (<200 °C). At high temperatures (>200 °C), they decompose and react with proteins via the Maillard reaction to form asphaltene (polycyclic aromatics), which contains large amounts of heteroatoms such as N and S. Although high-temperature carbohydrate conversion could yield more bio-crude with high energy values, it dominantly contributed to formation of the asphaltene fraction, which is difficult to upgrade catalytically. As high-temperature HTL requires a large energy input, the recovery and utilization of intact carbohydrates and proteins at mild temperatures (<200 °C) appears to be more promising. Energy Return on Investment (EROI) analysis also showed that 170 °C is the optimum HTL temperature for maximizing the energy production.