Abstract: An improved process and system for drying moist particulate carbonaceous materials. The invention has particular application to staged drying processes wherein the particulate material is entrained in one or more serially connect hot gas streams having a temperature above the degradation point of the carbonaceous material. The improvement includes providing contactors between the stages which intimately mix and contact the variously sized particles resulting in partial cooling of the smaller hot and dry particles and partial heating of the larger cool and relatively moist particles. The contactor may be provided by a rotating drum, moving bed, fixed bed or fluidized bed. The contactors prevent overheating of small particles during moisture removal and reduce hydrocarbon loss from small particle devolatilization.