Cu is one of the dominant heavy metals toxic to human health and environmental ecosystems. Understanding its fate and chemical speciation is of great importance for hydrothermal liquefaction (HTL) of Cu-rich hazardous streams. Herein, we investigated its evolution during the HTL of wastewater algae through ICP-MS, XRD, XANES, and EXAFS. Cu-cysteine complexes (51.5%) and Cu2S (40.4%) were the main components of Cu in algae, whereas the predominant form was CuS (70.9%) in 220 °C-hydrochar. Model compound experiments indicated that Cu-cysteine could be converted into CuS, while Cu2S was stable during HTL. However, Cu2S was partially converted into CuS in the hydrochar. Subsequently, the positive Gibbs free energy (36.8 KJ/mol) indicates that the oxidation from Cu+ to Cu2+ can't occur spontaneously. Furthermore, cyclic voltammograms demonstrated that hydrochar facilitated the oxidation of Cu2S due to its higher capability of electron acceptance. All these results prove that hydrochar serves as a catalyst for the conversion of Cu2S to CuS during HTL. This study firstly elucidated that Cu2S was oxidized into CuS in the presence of hydrochar, and Cu-cysteine was converted into CuS under HTL. This study provides a critical insight into the transformation mechanism of Cu during the HTL of hazardous streams.