The gasification of coal with steam at mild conditions in the presence of potassium carbonate and a nickel methanation catalyst produces a high-heating-value gaseous product. The single-step conversion is carried out at 650°C and 2-3 atm pressure. Between 60 and 70% of the coal feed is converted to a product gas with an 800–900 BTU/scf heating value. A qualitative discussion of the chemical reactions involved in the overall conversion is presented. During the gasification, some of the sulfur contained in the coal was deposited on the nickel methanation catalyst. Preventive schemes for alleviating this catalyst-poisoning problem were examined. These include in situ use of coal scavengers, catalyst regeneration, use of catalysts resistant to sulfidation, and a prior sulfur removal from the coal. Although each of these approaches provided encouraging results, none completely eliminated the problem. Experimental data showing the extent of the nickel catalyst sulfidation under each of these approaches and with the normal system are presented.