The coal hydrogenation reaction process is simply considered as three steps. In the first step, the smaller molecules associated with coal structure units are released as some gases and water in the condition of solvent and heating. In this step, some weaker bonds of the coal structure units are ruptured to form free radicals. The radicals are stabi-lized by hydrogen atoms from donor solvent and/or H2. In the second step, chain reaction occurs quickly. In the process of chain reaction, the covalent bonds of coal structure units are attacked by the radicals to form some asphaltenes. In the third step, asphaltenes are hydrogenated form more liquids and some gases. In coal liquefaction, the second step of coal hydrogenation reaction should be controlled to avoid integration of radicals, and the third step of coal hydrogenation should be accelerated to increase the coal conversion and the oil yield. A new concept of coal liquefaction process named as China direct coal lique-faction (CDCL) process is presented based on the mechanism study of coal liquefaction.