Globally, approximately 600-700 million tons/yr. of solid waste and 250-300 million tons/yr. of fecal sludge (FS) are not managed in an environmentally safe manner which is a major concern for global warming and climate change. Another environmental concern for global warming is wetlands that globally emit approximately 5 % of total greenhouse gases through organic biomass decomposition. To mitigate these environmental impacts, this study explored the waste-to-energy approach through a thermochemical conversion named hydrothermal liquefaction (HTL). While HTL has been extensively investigated for wet-feedstock valorization, less attention has been paid to enhancing the lighter fraction and heating value improvement. This study optimized the co-HTL process mechanism of organic solid waste (OSW) with Fecal sludge (FS) and peat at different mixing ratios (1:0, 1:3, 1:1, 3:1, and 0:1) and temperature variations (280 to 340 °C) for enhancing lighter biocrude production. The synergistic effect was observed during co-liquefaction of OSW with FS and peat for a mixing ratio of 3:1 at 320°C. The maximum biocrude yield of 51 - 52% was observed for co-liquefaction, of which 60 - 64 % was lighter-fraction. The light biocrude contained 45 - 60 % ester, 12 - 18 % organic acids, and 12 - 26 % fuel hydrocarbon fractions with a small amount of phenol, heterocyclic compounds, and amine derivatives. The findings demonstrated that the decarboxylation, deamination, and esterification mechanism was enhanced during co-liquefaction. The ester-hydrocarbon-rich biocrude exhibited a heating value of 37.4 - 42.7 MJ/kg, suggesting that the produced biocrude would be a potential alternative to fossil fuel (gasoline ~ 43.4 MJ/kg). This energetically feasible process would provide a revenue stream of $ 467 - 568 per metric ton of feedstock, validating the high economic prospects of the waste to energy approach.