Abstract: In the two stage liquefaction of a carbonaceous solid such as coal wherein coal is liquefied in a first stage in the presence of a liquefaction solvent and the first stage effluent is hydrogenated in the presence of a supported hydrogenation catalyst in a second stage, catalyst which has been previously employed in the second stage and comminuted to a particle size distribution equivalent to 100% passing through U.S. 100 Mesh, is passed to the first stage to improve the overall operation.