Energy use in the transport sector is heavily dependent on crude oil which is running out in a limited time. Under the pressure of oil dependency and climate change, the possibility of producing transportation fuels from biomass and wastes has been a more and more attractive subject. The first generation of biofuels for transportation, such as bioethanol, biodiesel and biogas produced from agricultural activities have been successfully introduced into the transport market in a number of countries. From the viewpoint of fuel potential, economics, environment, land use, water use and chemical fertilizer use, there is a strong preference for the use of woody biomass and various forest/agricultural residues as the feedstock. Thus, the production of second generation of biofuels i.e. synthetic transportation fuels such as methanol, DME, FT-diesel and hydrogen through biomass gasification seems promising. This paper is trying to review the present market of the first generation of bio-automotive fuels and the technology development of the second generation of bio-automotive fuels. It can be concluded that the second generation of bio-automotive fuels is on the way to a breakthrough in the transport markets of industrial countries especially for those countries with a strong forest industry. The first generation will remain as favourable bio-automotive fuels in the developing countries.