Ultra-large-scale synthesis of iron oxide nanoparticles (875 g) has been achieved in a single reaction via a facile solution-based dehydration process. The obtained nanoparticles capped with hydrophobic oleic acid ligands are magnetite with the average size of 5 nm. The synthesized samples exhibit a higher catalytic activity toward the direct coal liquefaction (DCL) than the commercial Fe3O4 powders. The conversion, oil yield, and liquefaction degree with the synthesized Fe3O4 nanoparticles are 89.6, 65.1, and 77.3%, respectively. The excellent catalytic performance of the synthesized Fe3O4 nanoparticles can be attributed to their extremely small size and high dispersity. This facile approach to prepare highly active nanocatalyst for the DCL will be applicable for future industrial processes.