X-ray photoelectron spectroscopy (XPS) has been used to investigate the surface and bulk characteristics of residue from liquefaction of Blind Canyon coal mixed with an iron-based catalyst. The liquefaction of Blind Canyon coal was investigated at three different processing times (17, 30, and 60 min); residues were studied by XPS. It is shown that the concentration of elements at the outermost surface layer of samples, measured by XPS, is different from the bulk. Ar+ ion sputtering followed by XPS was carried out to delineate the differences in the distribution of elements and chemical changes that occurred as the exposed surface varied from initial surface to the bulk. The elemental composition of the catalyst mixed with coal residue surface changes with time of Ar+ ion sputtering, i.e., with the depth from the initial surface of the coal residue particles. The S/Fe (catalyst element) ratio, which was initially greater than 1, decreases to less than 1 as time of Ar+ ion sputtering is increased.