The objective of the present work is co-production of bio-fuels and magnetic activated carbon (MAC) materials via fast pyrolysis of lignin and ferrous salts mixtures and steam activation of pyrolysis char. Specifically, the effect of the addition of the ferrous salts on the quality of biofuels including bio-gas and bio-oil is investigated. The effect of the addition of the ferrous salts on the mass loss rate of bio-chars during the steam activation process is also investigated. Results show that for the fast pyrolysis process, the addition of ferrous salts leads to a hydrogen rich bio-gas and non-guaiacols containing bio-oil production. The cracking effect of irons for the fast pyrolysis vapors is believed to be the dominated reason. For the steam activation process, the addition of the ferrous salts causes a relatively low mass loss rate of bio-chars, because steam can oxidize iron to form magnetite.