Due to their low cost, disposable nature, and high activity, iron-based catalysts were widely used in the main direct coal liquefaction (DCL) processes. In this study, a novel DCL iron-based catalyst NaFeS2 was synthesized via a simple chemical precipitation method, and its catalytic effect and mechanism on the liquefaction of Shangwan coal were investigated in a rapid heating tubing bomb reactor. Results showed that the coal conversion and oil yield with the as-prepared NaFeS2 in a hydrogen atmosphere and tetralin solvent (H2-Tetralin) is 83.5 % and 62.1 %, respectively, which are higher than those with the catalyst (SH-cat) currently used in the only commercial DCL plant. The GC-MS analysis of the liquefied oil suggested that during the DCL process NaFeS2 can promote hydrocracking of polycyclic aromatic hydrocarbons to produce more monocyclic aromatic hydrocarbons and reduce the content of oxygen-containing compounds (such as phenols and ethers), thus improving the quality of liquefied oil. The different catalytic performance and hydrogen consumption between NaFeS2 and SHcat in N2-Tetralin and H2-Decalin revealed that the transfer pathway of H2 to coal is different. The direct transfer of H2 to coal is the main way for SH-cat, while the transfer of H2 to coal through solvent is dominant for NaFeS2. NaFeS2 can be transformed into the active phase Fe1-xS at a low temperature (250 degrees C). At the same time, the Na+ released during the conversion may bind to the oxygen-containing functional groups in coal and promote their cracking, thereby generating more free radicals. These free radicals are hydrogenated and stabilized in time under the catalysis of Fe1-xS, resulting in much smaller molecules of oil and gas. This study developed a novel catalyst with a simple preparation process and high activity, which has a promising application in the DCL process and can provide reference and guidance for further development of iron-based catalysts for DCL.