Our previous work suggested that liquid product yields from wood, unlike those from other biomass types, were not increased by-CO/H2O reaction. Reactions of blue gum (BG) and fossil wood (FW) using high-temperature, high-pressure reactions have been investigated to define more precisely the biomass types for which CO/H2O is beneficial in liquefaction and to help understand the mechanism of the reaction. BG contains 25% lignin and 45% cellulose, whereas FW consists almost entirely of lignin derivatives with negligible cellulose derivatives. The effects of gas, water, and alkali have been investigated separately. Reactions of BG gave similar results under N-2, H-2, or. CO with or without added alkali, and improved yields were obtained with an increase in the water-to-biomass ratio. These results are in agreement with the reactivity Of BG being mainly associated with its carbohydrate content. In contrast, the product yield from FW was enhanced by the use of CO and further enhanced by the addition of a. strong base, sodium aluminate. Some of the effect of alkali addition is associated with the extraction of humic materials from the much greater amount of lignin present in FW. The beneficial effects of CO and alkali are both consistent with the greater phenolic content of FW. Surprisingly, increasing the water-to-biomass ratio for FAN led to a dramatic decrease in conversion to liquid products. The highest-quality products in terms of lower oxygen content were obtained from reactions of both BG and FW with CO/H2O/alkali.