This work was done to test the proposition that it is possible to produce high yields of two-ring compounds via direct liquefaction by selecting appropriate coal feedstock, catalyst, and reaction conditions. These products are valuable as starting materials for monomers of engineering plastics, for other specialty chemicals, and as constituents of a jet fuel having a high stability toward pyrolytic decomposition. An initial suite of eight coals was reduced to four candidates, based on reactivity in catalytic and non-catalytic liquefaction and on previously published structural characterization data. Further testing reduced the four candidates to two, Blind Canyon (Utah) highly volatile C and Pittsburgh No. 8 highly volatile A bituminous coals. The Pittsburgh seam coal is particularly attractive as a feedstock for this process. Liquefaction with a dispersed, sulfided molybdenum catalyst, followed by caustic washing to remove by-product phenols, provides approximate to 50% of yield of light liquid rich in two-ring compounds. Subsequent hydrotreating of a blended mixture of model compounds simulating the composition of the liquefaction product produces a material of exceptionally high stability in thermal stressing experiments. This liquid could be converted to a thermally stable jet fuel with further hydrotreating acid use of appropriate additive packages, (C) 2000 Elsevier Science B.V. All rights reserved.