The worsening environmental conditions, diminishing fossil fuel reserves, and increasing waste accumulation have redirected the attention of researchers and scientists towards the exploration of sustainable and non-exhaustive energy sources, as well as waste mitigation techniques. Among the various thermochemical technologies producing biofuels, hydrothermal liquefaction stands out as an effective technique for the simultaneous waste valorization and the production of sustainable biofuels. Under optimal conditions, hydrothermal liquefaction converts 70-80 % of feedstock energy into bio-oil, representing approximately 30-50 % of the feedstock's original mass. The review meticulously discusses and summarizes the process and reaction mechanism along with the influence of various factors on the hydrothermal liquefaction process, including the types of feedstocks (lignocellulosic biomass and plastic waste), operating conditions (temperature, residence time, pressure, substrate-to-water ratio, particle size, and heating rate), and catalyst types. According to the data documented in existing literature, the preferred temperature and residence time for attaining maximum bio-oil yields are reported to be within the range of 260-340 °C and 10-30 min for biomass, and 300-425 °C and 15-30 min for plastics. This review highlights the critical challenges in developing and scaling up the HTL process, proposing potential solutions to enhance feedstock conversion into value-added products. Additionally, it emphasizes the significance of understanding the chemical composition and synergistic interactions between lignocellulosic biomass and plastic waste to optimize product yields and enhance the overall process efficiency. Moreover, it discusses the different products of the hydrothermal liquefaction process-bio-oil, biochar, aqueous phase, and gaseous fraction-and their potential applications, while proposing techniques to upgrade the quality of biocrude.