The aim of the present study was to determine whether polyurethane (PU) foams can be prepared from heavy oil derived from biomass liquefaction. Since the hydroxyl number of the heavy oil was only 212 mg KOH/g, it was modified by polyols, and a hydroxyl number of 564.5 mg KOH/g was obtained. However, secondary hydroxyls rather than primary hydroxyls were introduced. As a result, when 10 wt.% activated heavy oil was added to bio-polyols, compressive strength of foams increased by 32% over that without the addition of heavy oil. When activated heavy oil wholly replaced polyethylene glycol 400, the high content of secondary hydroxyls depressed the foam reaction and resulted in partial dissociation of the heavy oil from the network structure and weakening of the thermal stability of the PU foams. Therefore, increasing the content of primary-hydroxyls by directional modification is necessary to make the process commercially feasible.