The invention provides a method for preparing liquid fuel with gamma-valerolactone. The method includes the following steps that a phosphoric acid solution and gamma-valerolactone are put in a reaction tank to react for 3-12 h at the temperature of 220-260 DEG C, the material is cooled to room temperature, and then the liquid fuel is obtained. The phosphoric acid solution serves as a catalyst, gamma-valerolactone can be catalytically converted through one step at mild temperature (220-260 DEG C), high-calorific-value light oil and heavy oil products are prepared, and the total oil yield can reach up to 33.5 wt%. The technical process flow is simple, operation is convenient, and industrial application prospects are achieved. Compared with other technologies for preparing high-grade oil products by catalytically converting gamma-valerolactone, catalytic conversion of the phosphoric acid solution has the obvious advantages that no expensive hydrogen needs to be provided externally, the reaction process is simple (one-step reaction), and the temperature is mild (the temperature is lower than 260 DEG C).