The invention relates to the field of biological energy, in particular to a process for producing fuel oil and chemical materials by utilizing biomass. The slurry is prepared by the following steps: performing drying, primary crushing, compression and secondary crushing on straws, mixing the powder, a first catalyst and a vulcanizing agent to obtain a mixture, adding the mixture into an oil product, and grinding to prepare slurry, namely the biomass slurry with the straw concentration of 30 to 60 percent by weight. The straws are initiatively subjected to the treatment process for compressingand crushing for the second time, the biomass is subjected to compression treatment, and the loose straws are subjected to the stages of ranking again, mechanical degeneration and shaping rheology, sothat the density and the specific gravity of the straws are increased, the straws are dispersed into the oil product, the content of the straws in the oil product can be increased, the concentrationof the reaction materials is increased, the quantity of conveying the biomass by the pump within unit time is increased, stable operation and conveying of the pump are guaranteed, and the conversion rate of the biomass and the yield of the oil phase are increased.