Liquefaction of coal is studied in a laboratory-scale impinging stream reactor. The effects of the temperature (430-520 degrees C), solvent/coal ratio (1-5), slurry/gas flow ratio (0.5-0.9), and nozzle distance (12-4 cm) on coal total conversion and product distribution are investigated. To determine the role of hydrogen gas, reactions are also carried out under a nitrogen gas atmosphere at the same reaction conditions. On the basis of the above studies, the determining step of coal liquefaction is the gas/liquid mass-transfer step. The use of this reactor system reduces the impact of slow diffusion of gas into the reaction medium. Hence, rather high conversion (80.21 wt %) is achieved.