The removal of sulfur species from the biomass-derived producer gas after gasification is required to protect downstream catalysts. Finding suitable materials for high-temperature desulfurization is one of the main challenges for the improvement in the efficiency of catalytic biomass conversion. The biomass-derived producer gas usually contains not only H2S but also organic sulfur species such as thiophene (C4H4S), which cannot be removed by most sorbent materials. Herein, we explored Al2O3-supported molybdenum catalysts as bifunctional materials for the removal of H2S and catalytic conversion of C4H4S at high temperatures. By using X-ray absorption spectroscopy under reaction conditions, we show that H2S is removed through the sulfidation of MoO3. C4H4S is catalytically converted over MoO2 to MoS2 and hydrocarbon species. The subsequent oxidation of MoS2 to MoO3 and SO2 regenerates the material and allows the sequestration of sulfur from the gas stream. Furthermore, the negative effect of steam on sulfur removal is shown to be caused by competitive adsorption with sulfur species. These findings show the possibility of the high-temperature desulfurization of biomass-derived gas for catalytic conversion, for instance, to synthetic natural gas.