Phosphomolybdic acid (PMA) has been found to be a very effective catalyst precursor for direct liquefaction of Wyodak coal. A concentration of 300 mg Mo/kg maf coal of PMA imparts greater activity when impregnated onto the coal compared to adding the crystalline solid directly to the reaction mixture. Significant improvement in the reaction occurred only when H2S was added to the reaction mixture, suggesting that the Keggin anion does not act as the catalyst. Impregnated PMA is at least as active as organically soluble molybdenum di(2-ethylhexyl)phosphorodithioate or oxothiomolybdenum N,N-dibutyldithiocarbamate. The method of impregnating the PMA from aqueous solution onto the coal did not have any significant influence on THF solubilization or resid conversion. It was also found that neither THF solubilization nor conversion to distillate was affected by impregnating the Mo precursor onto only 10% of the feed coal. However, if the PMA is impregnated onto a carbon carrier, which is then mixed with coal, very poor THF solubilization occurs.