Magnetic copper ferrite (CuFe2O4) was prepared by hydrothermal synthesis method and used for the catalytic hydroconversion (CHC) of Hanglaiwan long flame coal (HLFC) in cyclohexane under 1 MPa of initial hydrogen pressure (IHP) at 300 °C for 4 h. The total yield of soluble portion (SP) from the CHC is 33.7 wt%, significantly being higher than that (10.5 wt%) from the non-CHC (NCHC) under the same conditions. The main compounds detected in SPCHC (for CHC) are arenes and oxygen-containing organic compounds (OCOCs). Benzyloxybenzene (BOB), 2-(benzyloxy)naphthalene (BON), oxybis(methylene)dibenzene (OBMDB), oxydibenzene (ODB), and 2,2′-oxydinaphthalene (ODN) were used as HLFC-related model compounds to investigate the catalytic activity of CuFe2O4 and understand the CHC mechanism of HLFC. According to the model reactions, CuFe2O4 activates H2 to biatomic active hydrogen (H…H) and splits H…H to mobile H+ and immobile H-. H+ addition to oxygen atoms (OAs) in >C-O- bridged bonds (BBs) cleaves the BBs and releases SP during the CHC of HLFC.