Abstract: Direct coal liquefaction (DCL) under CO or syngas atmosphere is beneficial to reduce the cost of hydrogen production. Effects of CO on liquefaction process of Shangwan coal were investigated by comparing the liquefaction behavior in three atmospheres of CO, H₂ and N₂. Then, effects of different CO/H₂ ratios and catalysts on the liquefaction process in syngas were investigated. The results indicated that the oil yield under CO atmosphere reached 43.1%, which was 4.2% lower than that under H₂, but 10.2% higher than that under N₂. The liquefaction performance was further improved by adding the Shenhua 863 catalyst. It is analyzed that CO promoted liquefaction in two ways: water-gas shift reaction and the reaction between CO and organic structures of coal. Through characterization of the products by GC-MS and FT-IR, it was found that CO makes benzenes, aliphatics, and oxygen-containing compounds in liquefied oil simultaneously increased. The effect on functional groups and free radicals concentration in the solid products was not obvious. The experimental results under syngas showed that the highest oil yield, 57.4%, can be obtained in DCL with 20% CO syngas, and further improved by increasing moisture content of coal appropriately. In addition, the Shenhua 863 catalyst had a good catalytic effect on the liquefaction process and also water-gas shift reaction.