Abstract: Production of hydrocarbon oils by hydrocracking of finely ground coal under pressure by slurrying the coal, optionally with a catalyst, in a mixture of middle and heavy oil produced by the process, and heating the slurry to 380.degree.-440.degree. C. together with hydrogen under 100-400 bars pressure, and then passing the mixture through one or more reaction chambers kept at 420.degree.-490.degree. C. The reaction products are passed to one or more hot separators, part of the gas and vapor thus separated being passed through one or more reaction chambers containing a fixed hydrogenation catalyst. The other part of the separated gas and vapor is cooled directly. The middle and heavy oil used for the slurry is in part middle and heavy oil derived from the directly cooled stream while the other portion is a distillate oil derived from the bottoms sludge of the hot separator.