The co-liquefactions of Xilinguole lignite (XL) and lignin in ethanol/water solvents were carried out at N-2 atmosphere, and the effect of an in-situ H-2-reduced hematite ore catalyst was also discussed in this study. Ethanol-water (50:50, v/v) mixed solvent gave a high liquefaction conversion of 45.7 wt%, but the oil yield was low as 14.9 wt% in the co-liquefaction of XL and lignin at 360 degrees C, 60 min and N-2 atmosphere. Ethanol was a better solvent than ethanol-water (50:50, v/v) mixed solvent; it achieved both high of 44.3 wt% liquefaction conversion and 31.3 wt% oil yield in the same co-liquefaction condition. Formic acid could supply in-situ active H in the co-liquefaction of XL and lignin in ethanol/water solvents, and promoted the liquefaction conversion and oil yield. Addition of 10 v% formic acid in ethanol, the liquefaction conversion and oil yield further increased from 44.3 and 31.3 wt% (without formic acid) to 53.3 and 37.7 wt%, respectively in the co-liquefaction of XL and lignin at 360 degrees C, 60 min and N-2 atmosphere. There existed a synergistic effect in the co-liquefaction of XL and lignin, and the synergistic effect was further promoted by the in-situ H-2-reduced hematite ore catalyst. The oil yield increased from 34.5% without ore catalyst, to 48.7% under the ore catalyst, with the increments of 13.8% in the co-liquefaction of XL and lignin at 400 degrees C with ethanol as solvent and N-2 atmosphere. The characterization of co-liquefaction products suggested that the in-situ H-2-reduced hematite ore catalyst promoted more heavy constituents of XL converting into oil fraction, thus dramatically promoting the synergistic effect.