Conditioning of coal in steam is being explored with the goal of improving the yield and quality of condensable hydrocarbon product obtainable by mild gasification. A literature review shows that temperatures between 300 and 350/sup 0/C are promising for this purpose. In this range there is evidence that coal is thermally labile and that steam can dissolve in and react with coal. Experiments were conducted using a semicontinuous bench scale reactor processing up to 2.5 grams per run. Raw and conditioned samples of Illinois No. 6 coal were mild gasified in steam at atmospheric pressure and in inert gas at pressures up to 500 psia. Atmospheric pressure tests under inert gas were carried out with raw Kentucky bituminous coal, steam conditioned coal, and coal mixed with hydrated lime. When Illinois No. 6 coal is mild gasified in either inert gas or steam at atmospheric pressure, conditioning at 340/sup 0/C for 15 min. in 50 atm. steam increases the yield of condensable product by 30%. The corresponding result in inert gas for this sample of Kentucky bituminous coal is 5%. Considerable progress has been made in understanding the steam conditioning effect through comparative studies of steam conditioned, helium conditioned, and raw samples of Illinois No. 6 coal using solvent extraction, diffuse reflectance infrared spectroscopy, and solvent swelling. Extraction of steam conditioned coal with pyridine at room temperature gives twice the extract yield obtained from raw coal and in all respects parallels the results from mild gasification. Steam conditioning greatly increases the swelling of coal in water and water miscible solvents, but not in water immiscible solvents, and shows changes in the infrared spectrum only in the region attributed to hydroxyl groups. An interpretation of these results is that new hydroxyl groups are formed during steam conditioning at sites which in the starting coal are covalently bound. 97 refs.