Abstract: Oxygen and steam are mixed with partially reacted carbonaceous material within a first stage gasification zone to produce synthesis gas. The hot synthesis gas long with additional carbonaceous material is then reacted in a second stage hydropyrolysis zone. The reaction mixture is rapidly quenched and removed from the second stage thereby limiting the total second stage high temperature exposure time from about two milliseconds to about two seconds. The resultant products comprise char, gaseous and liquid hydrocarbons including high yields of benzene, toluene and xylene, and C.sub.1 -C.sub.4 gases. The first and second stages may consist of two separate reactors or two reactors integrated into a single vessel, each utilizing either an upflow or downflow configuration.