This research explores the enhancement of bio-oil quality through upgrading with the magnetic bimetallic oxide (CuO-Fe3O4) catalysts supported on activated rice straw biochar (AcB). These catalysts were employed in a supercritical ethanol-based upgrading process. Various characterization techniques, including elemental analysis, Fourier transform infrared (FTIR), X-ray diffraction (XRD), Brunauer-Emmett-Teller (BET) analysis, thermogravimetric analysis (TGA), and scanning electron microscopy (SEM), were utilized to characterize the prepared catalysts. This study revealed significant improvements in the physical characteristics and chemical composition of the bio-oil, with an increase in the heating value (HHV) from 21.3 to 32.1 MJ/kg. Esterification and transesterification were identified as key reactions contributing to this improvement. Notably, the pH of bio-oil increased from 4.3 (raw bio-oil) to 5.63 (after upgrading), signifying reduced acidity. The analysis of the bio-oil’s chemical composition highlighted a decrease in oxygen content and an increase in carbon and hydrogen content. At the optimum conditions, the application of supercritical ethanol proved to be an efficient method for enhancing the bio-oil’s properties. A crucial transformation occurred during the upgrading process and more than 90% of carboxylic acids were converted into esters, primarily ethyl acetate at the optimal conditions. This study has demonstrated the effective enhancement of raw bio-oil from rice straw through the utilization of carbon-based bimetallic oxide catalysts in a supercritical upgrading procedure.