Abstract: In a coal liquefaction process wherein heavy bottoms produced in a liquefaction zone are upgraded by coking or a similar pyrolysis step, pyrolysis liquids boiling in excess of about 1000.degree. F. are further reacted with molecular hydrogen in a reaction zone external of the liquefaction zone, the resulting effluent is fractionated to produce one or more distillate fractions and a bottoms fraction, a portion of this bottoms fraction is recycled to the reaction zone, and the remaining portion of the bottoms fraction is recycled to the pyrolysis step.