Abstract: Modification of low rank coal by thermal treatment is the key to its high-efficiency conversion and utilization. In this paper, the thermal treatment and hydrothermal treatment of Xianfeng lignite were carried out. By combination of the characterizations of structure and properties of treated coals, the modification of thermal treatment and the interaction of water in the hydrothermal process were investigated. The results indicate that the disassociation of non-covalent bonds and the pyrolysis of weak covalent bonds dominate in the treatment process below the pyrolystic temperature of lignite. The hydrothermal reaction can inhibit the pyrolysis of coal matrix and the release of small molecular compounds in the process of hydrothermal treatment. At higher than the pyrolysis of lignite, the thermal treatment shows obvious pyrolysis and deoxygenation. The hydrothermal reaction can provide active hydrogen to stabilize the pyrolysis fragment and avoid the secondary pyrolysis and condensation, so that the extraction and swelling properties of hydrothermal treated coal in mixed solvent were improve at certain extent.