A set of low-cost monometallic Fe, Ni, and bimetallic Fe-Ni bifunctional H-Y-5.1 catalysts with different metal ratios were synthesized by sequential incipient wetness impregnation. The catalysts were characterized in detail by N2 physisorption, Fourier transform infrared spectroscopy with pyridine, inductively coupled plasma optical emission spectroscopy, X-ray diffraction (XRD), transmission and scanning electron microscopy (TEM-SEM), magic angle spinning nuclear magnetic resonance, X-ray photoelectron spectroscopy (XPS), Mössbauer spectroscopy, magnetic measurements, temperature-programmed reduction (TPR), and X-ray absorption spectroscopy (XAS). The results revealed that introduction of Fe led to a decrease of strong acid sites and an increase of medium Brønsted acid sites, while introduction of Ni increased the number of Lewis acid sites. The particle size of iron was approx. 5 nm, being ca. fourfold higher for nickel. XPS demonstrated higher iron content on the catalyst surface compared to nickel. Both Mössbauer spectroscopy and magnetic measurement confirmed the ferromagnetic behavior of all catalysts. In addition, the results from XRD, TEM, XPS, XAS, and magnetization suggested strong Fe-Ni nanoparticle interactions, which were supported by modeling of TPR profiles. Catalytic results of the co-processing of fossil feedstock with lignin-derived isoeugenol clearly showed that both product distribution and activity of Fe-Ni catalysts strongly depend on the metals’ ratio and their interactions. Key properties affected by the Fe-Ni metal ratio, which played a positive role in co-processing, were a smaller medial metal nanoparticle size (<6 nm), a lower metal-acid site ratio, as well as presence in the catalyst of fcc FeNi alloy structure and fcc Ni doped with Fe.