A system and process for processing biologically-derived compounds or a complex bio-oil by converting cyclic compounds in a complex bio-oil or biologically-derived compounds to desired materials such as high molecular weight paraffins with minimal carbon loss by using a ring-contraction catalyst to selectively produce C5 ring containing compounds; and then reacting the C5 ring containing compounds with a C5 ring opening catalyst in a second reactor to minimize carbon loss via cracking reactions.