To date, no economically feasible organic sulfur and hazardous air pollutant (HAP) precursor removal process has been developed; however, an effective sulfur and selected HAP removal process is needed to enhance the utilization of high-sulfur coals and to comply with increasingly stringent regulations. Subcritical water has been shown by the Energy & Environmental Research Center (EERC) researchers on this project to be an extremely effective fluid for the removal of organic sulfur from coals. A multigram reactor designed and built at the EERC for supercritical water extraction was used to scale up from milligram-sized samples to 10-20 grams of coal charge. Work performed during this project year resulted in production of low-sulfur (as low as 0.5% S) extracted coal first at supercritical conditions, i.e., 450{degrees}C and 400 atm (5880 psig), but then at conditions below the critical conditions, i.e., 420{degrees}C and 156 atm (2300 psig). Still milder conditions of 400{degrees}C and 156 atm (2300 psig) resulted in sulfur values similar to those of obtained under the supercritical conditions. IBC-102 extracted with supercritical water had a sulfur value of 0.7 wt%. Extraction of IBC-102 at subcritical conditions of 420{degrees}C and 156 atm (2300 psig) resulted in a sulfur content of 0.490A. The tar obtained from the extracted coal had sulfur values ranging from 1.4 to 6.5 wt% and when treated by catalytic desulfurization, tar was quantitatively recovered with a sulfur value of 0.6 wt%. Float-sink physical cleaning of IBC-102 with Certigrav 1.4 reduced the sulfur content of the coal to 1.5 wt% in a recovered float fraction of 83.3%. Approximately 300 lb of IBC-102 was obtained for use in preparing 100 lb of low-sulfur fuel. Float- sink cleaning on a sample of this new coal returned 87.1 wt% as float fraction, with 1.7 wt% sulfur. 158 lb of physically cleaned IBC-102 was used for the continuous process test on the pilot scale. An additional 150 lb of physically cleaned coal slurry was received from Dr. R. Honaker of southern Illinois University (SIU) for testing in the continuous unit. The hydrothermal process development unit (PDU) in the continuous mode was used to prepare 100 lb of low-sulfur fuel from physically cleaned IBC-102 at three temperatures (300{degrees}, 325{degrees} and 340{degrees}C) and a pressure of 2300 psig. Residence time was controlled by flow rate. Treating a swelling coal such as IBC-102 required a slurry with low solids loading to prevent plugging due to expansion during residence in the reactor. In this preliminary test with physically cleaned IBC-102, the sulfur content was decreased by as much as one-third, few volatiles were lost, and mercury and selenium levels were decreased by 87% and 46%, respectively.