A two-stage reactor composed of a slurry bubble column and a fixed bed was proposed. The slurry column, installed with a radio frequency conductance liquid level controller, was considered not only as a preliminary reactor for the vaporization of the liquid reactants, but also as a protector to prevent liquid flooding in the fixed bed. Preliminary experiments were carried out to investigate the effects of different operating factors on the reactor performance, and the results showed that even under the optimal condition the benzene concentration should be kept at a low level of 21.9% to avoid high temperature rise. Therefore, side stream injection of cyclohexane into the fixed bed was proposed, and benzene conversion of 99.82% was reached even at a much higher concentration of 32.8%. To verify whether capillary condensation inside the catalyst particle in the fixed bed would exist in the presence of coolant injection, a criterion was proposed which is based on the understanding that once vapor condensation is occurring it will lead to multiplicity in reaction rate, which will consequently result in hysteresis in temperature profile under adiabatic condition.