The influences of inherent moisture in Collie coal during pyrolysis has been studied using a series of Collie coal samples, including the raw coal, dilute acid-washed coal, and demineralized coal samples of both pulverized fuel and millimeter sizes. Coal without drying (moisture content 20%) and dried coal (moisture <1%) were pyrolyzed under various conditions in a fixed-bed reactor, a drop-tube/fixed-bed reactor, and a fluidized-bed reactor. Measurement of char reactivity in air was carried out using a thermogravimetric analyzer. The results demonstrated that inherent moisture in Collie coal had a significant influence on the char yield and reactivity, depending on the pyrolysis conditions. Under slow-heating conditions in the fixed-bed reactor, moisture was swept out of the reactor during the long heating process, leading to little influence on char yield and reactivity. However, under fast-heating conditions with continuous coal feeding in the drop-tube/fixed-bed or fluidized-bed reactor, significant interactions between steam produced in situ (from the coal inherent moisture) and the reacting coal/char occurred. The steam gasified the coal/char significantly at temperatures > 800 °C, leading to much lower char yields. Inorganic species in the coal/char also appeared to play an important role in such in-situ steam gasification. In the drop-tube reactor, where the interaction time was much shorter, a noticeable effect on the char yield was only observed at temperature > 1000 °C. Char reactivity data indicated that the steam−char interactions also led to considerable deactivation of the char at high pyrolysis temperatures. As the coal particle size increased, the effect of inherent moisture decreased. The results presented in this paper indicate that inherent moisture in low-rank coals can significantly change the properties of chars from the thermal upgrading of the coals, especially in processes where the coal/char particles experience long residence time or strong and prolonged interactions with steam produced in situ.