Catalytic pyrolysis is a cost-effective technology for high-quality biofuel production. Biomass is converted to bio-oil by a thermal process in the presence of a catalyst. Catalyst development influences the reaction-pathway control to form a specific product. Here, the catalytic pyrolysis of palm kernel shells was investigated on melamine-doped activated-carbon-supported Ni₂P. Different amounts of melamine (25–100 wt% support) were loaded on activated carbon by impregnation and carbonization, while the Ni₂P catalyst was fabricated by the co-impregnation of nickel nitrate and ammonium hydrogen phosphate. The interaction between nitrogen-containing functional groups on the carbon surface and Ni₂P caused a uniform dispersion of small-sized crystalline Ni₂P particles on the activated-carbon surface, reduced from 28.91 nm to 10.85 nm, as shown by transmission electron microscopy analysis. The Ni₂P/CN catalyst exhibited high oxygen removal and alkylphenol selectivity (more than 63%) in the liquid product at 350 °C under atmospheric pressure. Therefore, the Ni₂P/CN catalyst described here exhibits good potential for high-selectivity catalytic pyrolysis of biomass to produce phenolic compounds, which have wide application in monomers and fuel additives.