A jet loop reactor system has been developed for use with reaction systems such as coal liquefaction that are gas-liquid mass transfer limited. The reactor system has the ability to process slurries and permits better control of free-radical generation/reaction and provides higher mass-transfer rates than conventional reactors. The developmental efforts for the reactor system were carried out using model reactions such as naphthalene hydrogenation. The reactor system performed better than conventional tubing bomb microreactors and required considerably less catalyst. The reactor system provided higher conversions even at higher temperatures and was operating in a regime where gas-liquid mass transfer was only partially controlling. A unique gas-driven pumping system was developed for use with the reactor system under severe coal liquefaction conditions because of the prohibitive cost of a suitable mechanical pump. The integrated reactor system was used to coprocess coal with waste oil.