Abstract Paecilomyces TLi, a fungus isolated from coal, had previouslt been shown to transform solid coal into a water-miscible liquid during surface growth on coal or on a complex, solid microbiological medium. Coal solubilization has now been demonstrated in submerged cultures grown in defined liquid minimal media, although activity under these conditions is less than that observed in surface culture. Coal solubilization occurs under both alkaline and acidic conditions. Alkaline catalysis by biogenic material(s), produced in specific response to the presence of coal, has been implicated in both systems. A variety of oxidized hydrocarbon substrates, including both aliphatic and aromatic compounds, can be utilized by this organism. Coal solubilization is enhanced by growth on aromatic compounds structurally related to lignin or coal monomers. Preliminary evidence suggests that coal solubilizing activity is self-regulating in this organism.