Coal liquefaction may involve cleavage of methylene, dimethylene and ether bridges connecting polycyclic aromatic units and the reactions of various oxygen functional groups. Here in this quarterly, we report on the effects of dispersed Mo catalysts and H{sub 2}O addition on hydrogenation and C-C bond hydrocracking of 4-(1- naphthylmethyl)bibenzyl, abbreviated as NMBB. Recent research in this laboratory has demonstrated a strong synergistic effect between a dispersed Mo sulfide catalyst and water in low-severity coal liquefaction reaction. This finding prompted us to examine the effects of dispersed Mo catalysts and H{sub 2}O addition on hydrogenation and C-C bond hydrocracking of 4-(1-naphthylmethyl)bibenzyl, NMBB. Batch studied in microautoclave reactors at 350 and 400{degrees}C for 30 min revealed that active catalysts can be generated in situ from either ammonium tetrathiomolybdate (ATTM) or Mo(CO){sub 6} under the reaction conditions (350 or 400{degrees}C, 30 min), with the main catalysis of the latter for NMBB hydrogenation, but the former for C-C bond cleavage. Water may have strong promoting effect on NMBB conversion in catalytic runs, depending on the conditions. At 350{degrees}C a 50% increase in NMBB conversion was observed upon H{sub 2}O addition to the run using ATTM (1 wt % Mo) as catalyst. However, at 400{degrees}C no major difference in conversion or product distribution was found. Runs of NMBB at 350{degrees}C using Mo(CO){sub 6} lead to tetrahydro-NMBB-derivatives and few cleavage products. Water added to Mo(CO){sub 6} suppressed hydrogenation. The combination of Mo(CO){sub 6} and S lead to almost complete conversion of NMBB. A run with Mo(CO){sub 6}/S/H{sub 2}O gave similar results. It appears that water can increase NMBB conversion with ATTM at 350{degrees}C but decreased conversion for runs at 400{degrees}C. Also contained in this report is mechanistic discussion for hydrocracking and hydrogenation of NMBB.