Biomass energy has been utilized to diverse fields in recent years because of the advantages of abundant resource, non-pollution, sustainability, low cost and easy acquisition, etc. The exploitation for high-value added products are of great significance to the diversity of resource utilization and the solution of energy crisis. Wood vinegar (WV) is a high-value added and environmentally friendly by-product from the production of biomass charcoal via a pyrolysis process. WV has been widely used in the various fields, e.g., agriculture, forestry, animal husbandry, energy industry and pharmaceutical industry, etc., on which WV had the positive effects. The review summarizes the recent research progresses in the preparation technologies, physicochemical properties and separation technologies of WV, and expounds the formation mechanisms of WV from the perspectives of the pyrolysis of biomass constitutions, i.e., hemicellulose, cellulose and lignin. The color and density of WV are buff or reddish brown and 1.00—1.13g/cm3, respectively. The pH value and organic acid content of WV are 2.27—3.32 and 2.07%—13.82%, respectively. Particularly, WV prepared at 170—350°C meets the Japanese standard of WV in agricultural use. The acids, phenols, ketones, furans, aldehydes, alcohols, esters and ethers organic matters are abundant in WV. Wherein, the excellent antimicrobial and antioxidant activities are attributed to the acidic and phenolic compounds, mainly acetic acid and guaiacol. Especially, the unique characteristic of smoke odor is caused by the phenols. In general, the high-quality WV is obtained by the combination of different separation methods, which could be used for several applications in various fields. During the pyrolytic process, free water, absorbed water and bound water in biomass are firstly evaporated out in sequence with the increasing temperature. Then, hemicellulose, cellulose and lignin are decomposed into the volatile organic matters and H2O. Finally, WV is formed by the co-condensation of all matters. However, there exists the bottlenecks that the yield of WV prepared by traditional pyrolytic process is low and the effect of temperature on the content of composition is significant. It is reported that WV prepared by hydrothermal process had high yield and low content of tar, including more abundant types of the organic compounds. Besides, direct extraction from bio-oil provides an alternative way to prepare WV with the same organic components. Above all, future researches should pay more attention to not only develop the high-efficient and simple technologies to produce and separate WV, but also investigate the process mechanisms. Simultaneously, it is facilitate to prepare high-quality WV by the combination of advanced catalytic technology and membrane separation technology, utilizing in the various fields directly, in order to achieve the large-scale application as soon as possible.