Abstract: A two-stage catalytic hydroconversion process for heavy hydrocarbon feedstocks usually containing fine particulate solids to produce lower boiling hydrocarbon liquid and gas products. The feedstock is fed into a first stage ebullated bed reactor containing fine sized catalyst and operated at moderate reaction conditions for hydroconversion to produce hydrocarbon gas and liquid fractions, from which a low boiling liquid fraction is separated and withdrawn as a product. The remaining gas and heavier liquid fractions are recombined and fed to a second stage ebullated bed reactor containing larger size catalyst for further hydroconversion reactions at less severe conditions to produce lower boiling hydrocarbon liquid fractions. Following product distillation steps, liquid product fractions are withdrawn and a portion of vacuum bottoms material is recycled to the second stage reactor to provide increased hydroconversion and improved yields of the light hydrocarbon liquid product.