Coal model compounds were hydrogenated and desulfurized in the presence of solvent and catalyst by using syngas with steam in place of hydrogen. Nickel molybdate catalyst exhibited good activities for hydrogenation and desulfurization of model compounds at high pressure and elevated temperature with the use of syngas and steam. Extensive water-gas shift conversion also took place simultaneously. Hydrogenation of phenanthrene and dibenzothiophene was carried out in syngas-water systems, and the results were compared with those obtained in Hz system. The extent of hydrogenation increased with the increase of H-2/CO mole ratio in syngas. Hydrogen consumed during the hydrogenation was replenished by the accompanying water-gas shift reaction in syngas-H2O systems. Hydrodesulfurization of dibenzothiophene carried out in H-2-CO-D2O and D-2-CO-H2O systems yielded deuterated products of cyclohexylbenzene and biphenyl in both systems, indicating that both active deuterium produced via water-gas shift reaction of CO with D2O as well as deuterium in gas phase participated in the hydrodesulfurization along with the hydrogen/deuterium exchange reaction with substrates.