Sugarcane bagasse was pyrolyzed using a laboratory fixed bed reactor to produce char and its by-product (pyrolysis liquid). The pyrolysis experiments were carried out using different temperatures (400°C and 500°C), heating rate (1 °C/min and 10 °C/min), and holding time (30 min and 60 min). Char was characterized according to its thermal properties, while the pyrolysis liquid was tested for its anti-fungal and anti-termite activities. Pyrolysis temperature and heating rate had a significant influence on the char properties and the yield of char and pyrolysis liquid, where a high-quality char and high yield of pyrolysis liquid can be obtained at a temperature of 500°C and a heating rate of 10 °C/min. The yield of char and pyrolysis liquid was 28.97% and 55.46%, respectively. The principal compounds of pyrolysis liquid were water, acetic acid, glycolaldehyde, 1-hydroxy-2-propanone, methanol, formic acid, levoglucosan, furfural, followed by some phenol compounds and guaiacol derivatives. Pyrolysis liquid at a concentration of 0.20% and 0.25% (v/v) caused a 100% inhibition of Coniophora puteana and Trametes versicolor, respectively, when performing inhibition growth tests in Petri dishes. Filter paper treated with 10% of pyrolysis liquid caused 100% of termite mortality, while only 5.65%–7.03% of the treated filter papers consumed by termites at such concentration. Pyrolysis liquid is potentially effective to be used in the formulation of wood protection against fungi and termites.