Extensive deposits of brown coal exist in the Gippsland Basin, primarily in the Latrobe Valley. The total quantities of economically winnable coal in this region of Victoria and in other smaller fields are large enough to adequately assure Victoria’s future electricity needs and to also provide large quantities for alternative applications, including liquefaction. As a result of the recent conflict in the Middle East attention has again been focussed on the production of synthetic fuels from coal. There have been many investigations over the years into the production of oil from Victorian brown coal. The purpose of this paper is to summarise the scope, objectives and major findings of these studies, with the emphasis on the direct hydrogenation route for converting brown coal to oil. The principal alternative processes are carboniastion and hydrotreatment of the product tar, or gasification and Fischer Tropsch synthesis of liquids from the product gas. The attractions of Victorian brown coal which have encouraged these studies include: • the vast reserves of Victorian brown coal and the favourable conditions for low cost mining, • the high quality of the coal (low ash, sulphur and nitrogen contents), • the high reactivity of the coal giving high yields of product in hydrogenation to liquid fuels, • the extensive data base available on the resource and its characteristics, and • the availability of a skilled workforce and extensive infrastructure in the Latrobe Region to support a major resource development project. These advantages have been partially offset by: • the high moisture content of the brown coal and the cost of drying, and • the priority previously given to electricity generation in the allocation of the brown coal resource.