The catalytic activity of pyrite and synthesized alpha-FeOOH in coal liquefaction was investigated using batch autoclaves with the aim of developing an industrial iron catalyst. The results indicate that the presence of H2S helps gaseous hydrogen transferring and prevents deactivation so that the catalyst promotes hydrocracking of coal and hydrogenation of the products. The activity converges with excess H2S and sulfur addition equivalent to an S/Fe molar ratio of 2.0 being reasonable for the activation. The active site is located on the outer surface, with finely divided catalysts exhibiting high activity. Both pulverized pyrite and synthesized alpha-FeOOH are sufficiently fine as to exhibit high activity in the process. Pulverized pyrite is an industrially feasible iron catalyst for coal liquefaction process, because it is inexpensive and does not require sulfur addition.