A high-sulfur bituminous coal suspended in coal tar was hydrosulfurized by continuous processing through a fixed bed of pelletized cobalt molybdate on alumina catalyst, under conditions of a highly turbulent flow of hydrogen to prevent obstruction of the flow fluids and to promote catalytic contact. High yields of low-sulfur oil were obtained. The feed contained 30 percent coal of 3.4 percent sulfur suspended in tar of 0.6 percent sulfur. For process conditions of 4,000 psig and 450 deg. C, the yield of whole liquefied product was 94 percent of the whole feed. The product had 9 percent benzene-insoluble residues and only 0.3 percent sulfur. Most of the sulfur was in the insoluble residues and was organic. By separating the insoluble resides, the whole product gave a 91- percent yield of benzene-soluble fuel oil having only 0.09 percent sulfur. For the milder conditions of 2,000 psig and 450 deg. C, the whole liquefied product was 93 percent of the feed and had 13 percent insoluble residues and 0.4 percent sulfur. By separating the residues this product gave an 87-percent yield of fuel oil having only 0.14 percent sulfur. Commercially, part of the separate oil would be recycled to suspend the feed coal instead of using the tar. Thus, the net product for fuel use would derive entirely from coal and is expected to have sulfur at least as low as reported above. This work presents a method for providing large amounts of low-sulfur fuel.