Direct liquefaction of coal was studied using ferric sulfide-based catalysts generated in an aerosol reactor. The catalyst materials were prepared under varying conditions of temperature, pressure, and precursor concentration. In some runs, Fe-Cu-S mixed-metal catalysts containing 10 and 40% of Cu (based on total metal) were also used. Characterization studies reveal that the catalysts consist of hollow particles 3-20 nm in diameter, aggregated in clumps. Liquefaction experiments were performed at 350-440 degrees C under a hydrogen pressure of 1000 psi(cold) and 30 min reaction time with tetralin or phenanthrene as solvent. The catalyst activity and selectivity to oil-range products increase with increase in temperature of the aerosol reactor. The selectivity improves slightly when the catalyst exposure to air is minimized. The catalytic effects are more pronounced with phenanthrene as solvent. At 400 degrees C, both the conversion of coal and the oil yield increase with increase in catalyst loading, but the effect is more pronounced at low loadings. The conversion also increases with the liquefaction temperature, from 50% at 350 degrees C to 87% at 440 degrees C, with 1.67% loading. The addition pf Cu to the Fe-S system increases the selectivity slightly, but at the expense of conversion.