Conversion characteristics of a Victorian brown coal in sub-critical water were investigated. Pulverized brown coal was heated up to 623 K in flowing sub-critical water pressurized at 25 MPa. The total conversion of the coal into extract and non-condensable gas reached over 70 wt%-daf, which was appreciably higher than the maximum conversion (50 wt%-daf) with a sub-critical non-hydrogen donor solvent, 1-methylnaphthalene (MN). Laser-ionization-desorption mass spectrometry showed that the sub-critical water extract was richer in lower-molecular-mass compounds than the sub-critical MN one. Thus, degradation of the coal occurred more extensively in sub-critical water than in MN. Along with the conversion in sub-critical water, both the total contents of hydrogen and phenolic hydroxyls in the whole products remained nearly unchanged. This suggests comparable and simultaneous formation and decomposition of hydroxyls through hydrolysis of ethers/esters and dehydration condensation between hydroxyls/carboxyls, respectively. For detecting the hydroxyl formation, the coal was first heated at 623 K under an inert gas atmosphere until the formation of water and the other volatiles was completed. Then, the heat-treated coal (LY-H) was exposed to flowing sub-critical water. As expected, the net formation of phenolic hydroxyls from LY-H was detected as 0.8 mmol-OH/g-LY-H while that of hydrogen as 2.3 mmol-Hg-LY-H. Approximately a half of the hydrogen gain was explained as phenolic hydroxyls gain, suggesting the importance of hydrolysis of esters and ethers that formed carboxyls and alcoholic hydroxyls as well as phenolic hydroxyls. (C) 2004 Elsevier Ltd. All rights reserved.