Direct coal liquefaction (DCL) is a process for converting coal to synthetic oils, which can be refined to make transportation fuels. Residue from this process contains inorganic material such as mineral matter originating from the coal and catalysts, and organic matter such as unconverted coal, heavy oils, pre-asphaltenes and asphaltenes. The conversion of these DCL residues to lighter, high-value products is an important step in helping to make this technology both commercially viable and environmentally acceptable. This paper provides an overview of the physico-chemical characteristics and processing options available for coal liquefaction residues and compares and contrasts them to those of petroleum residues. Residue properties vary considerably, since they are highly dependent on feed coal, process configuration and operating conditions. Determination of composition and structural parameters of products derived from residue conversion can help determine their stability, coking and solvent hydrogen donating ability. Thermal conversion processes such as visbreaking and gasification offer the greatest promise for handling these heavy materials. The conversion chemistry, reactivity and kinetics of residue gasification are not well-understood but are important in optimising hydrogen production for the process. The literature has been comprehensively reviewed to provide characteristics and properties of residues and their potential for conversion. In addition, the potential for producing high-value carbon products from residues is briefly discussed.