This article presents a design study and the development of a low-cost production process for obtaining bio-oil from sugarcane bagasse by using a Circulating Fluidized Bed reactor (CFBr). The reactor had a diameter of 4 in. and a height of 4.5 m. In addition, sand with a diameter of 249 mu m was used as the bed material. Sugarcane bagasse was used as the raw material for the bio-oil production. This bio-oil production system had a feed rate of between 18 and 45 kg/h. The outstanding design of this system consisted of the production of a bio-oil with high efficiency by using the following: (1) a gas combustor used in gas turbine engine, (2) a non-condensable gas recovery for use in the process, and (3) a feeder and pre-heat exchanger before condenser unit. The experiment was performed at a superficial velocity of between 5 and 7 m/s, with a bed temperature ranging from 440 to 520 degrees C, and with a bed inventory at 0.5 and 4.5 kg. From the experiment, it was found that this system could produce a maximum yield of bio-oil of 78.07 wt\% at the bed temperature of at 480 degrees C. In addition, the superficial velocity, the bed inventory, and feed rate were 7 m/s, 4.5 kg, and 30 kg/h, respectively. The properties of the bio-oil, such as its heating value, viscosity, density, and pH were measured at 18,483 kJ/kg, 24.54 cSt, 1274 kg/m(3), and 2.4, respectively. The chemical components of bio-oil were also investigated by GC-MS. In this system, the cold efficiency and total energy conversion to bio-oil production were 46.06\% and 32.94\%, respectively. From a cost analysis of bio-oil production, the results showed that the cost production was 0.353 \$11. In addition, the results revealed that the bed temperature, the solid re-circulating rate, and the suspension density had significantly and directly affected the yield of bio-oil production. Furthermore, the oxygen in the exhaust gas from the combustion system and the non-condensable gas from the process had been shown to have a direct effect upon the properties of the bio-oil.