A multistage liquefaction scheme consisting of coal pretreatment, solvent-mediated hydrogen-transfer dissolution, and catalytic hydrocracking steps was proposed in order to achieve the highest oil yields with complete conversion of organic components in coal and-to enable the recovery and repeated use of the catalyst with its least deactivation. The deashing pretreatment enhanced the depolymerization of coal macromolecules through the removal of bridging ion-exchangeable cations as well as the better contact of donor solvent with coal macromolecules. The highest oil plus asphaltene yield of ca. 75% was obtained through the two-step liquefaction of acid-treated Morwell coal by the reactions of noncatalytic hydrogen transfer (donor solvent : tetrahydrofluoranthene, solvent/coal = 1) at 430 degrees C-2 min in the first step and the following catalytic hydrogenation with a pyrite catalyst at 400 degrees C-20 min. The multistep liquefaction scheme is discussed in terms of the highest efficiency of utilization of solvent and catalyst at the respective step. Two types of recoverable catalysts were investigated to allow repeated use of the;catalyst in the primary liquefaction. The first type was an acid-proof iron catalyst which was recoverable from:a mixture with residual carbonates and chlorides that are soluble in acids. Such a catalyst was applicable to particular coals; such as an Australian brown coal which is completely liquefied,leaving calcium and magnesium carbonates as the major residual minerals after the primary liquefaction. The second type was characterized by its sulfur-proof ferromagnetism for the recovery from the minerals and carbons by gradient magnetic field. Fe3Al powder and carbon/ferrite composite catalysts were found to maintain their ferromagnetism after the sulfiding to be fairly active in the liquefaction of the brown coal. Procedures for activation, recovery, and repeated use of these recoverable catalysts were preliminarily examined.