A process for preparing a molybdenum sulfide-based catalyst comprises drying a precipitated molybdenum sulfide-based catalyst precursor, for example, a wet filter cake, such that a particulate catalyst precursor, containing from 12 to 15 percent by weight water, is formed. The particulate catalyst precursor is desirably in the form of free-flowing particles. The particulate catalyst precursor is then auto-reduced. A rotary furnace that subjects the catalyst precursor to at least two zones having distinct temperatures may be conveniently used for drying, auto-reduction, or both. The staged drying and auto-reduction steps reduce the tendency of the precursor to self-heat, which is undesirable because it reduces both the activity and selectivity of the final catalyst.