To improve the product quality in the NEDOL coal liquefaction process (which was developed by the New Energy and Industrial Technology Development Organization, NEDO), improvement of the NEDOL process was proposed and tested by a continuous plant, which can process 1 ton of coal per day. In the improved process, the products and recycle solvent are simultaneously hydrogenated in the solvent hydrogenation section. Although the recycle solvent of the improved process became lighter and degradation of the recycle solvent quality was supposed, via more-severe hydrogenation conditions in the solvent hydrogenation section, the hydrogen-donating capability of the recycle solvent was maintained and degradation was not recognized. On the other hand, the hydrodynamics of the coal liquefaction reactors was studied and mean residence time of the liquid phase (MRT) in the coal liquefaction reactors was measured using neutrons. An increase in the MRT was observed, and this increase seemed to be caused by vaporization of the increased lighter fraction in the recycle solvent. As a result, the product oil yield was increased by 2-3 wt %, compared to the original NEDOL process, and remarkable reduction of the heteroatoms in the product oils was confirmed. The nitrogen content in the products was reduced from several thousands parts per million (ppm) in the original NEDOL process to < 1000 ppm. Furthermore, through the experiment in the plant, stable continuous operation for >50 days in the improved process, which adopts simultaneous hydrogenation of the products and recycle solvent, was achieved, and the reliability of this process was verified.