This study has clarified the speciation of sulfur in the pyrolysis char of Victorian brown coal and its evolution during char gasification in oxy-fuel combustion. The synchrotron XANES has been used for sulfur speciation. Coal pyrolysis was first carried out in a lab-scale drop-tube furnace (DTF). The resulting char was then size-segregated and gasified in O-2/N-2 and O-2/CO2 gases to examine the evolution of sulfur as a function of particle residence time and oxygen fraction in bulk gas. The results indicate that thiophenic sulfur is the predominant form for sulfur in raw coal and its pyrolysis char. The substitution of O-2/CO2 for O-2/N-2 slightly increased the rate of mass loss of sulfur upon char gasification, due to thermodynamically viable routes for the decomposition of thiophene into COS and CS2 in CO2, rather than HS in N-2. For the small char particle rich in highly reactive alkali and alkaline earth metals, the extra loss of sulfur in CO2 was readily stabilized into sulfate on the local char surface at a relatively long residence time of about 1.6 s in the DTF. The participation of inherent oxygen in char is essential for the sulfation reaction; however, this was inhibited by introducing oxygen into the bulk gas. The rapidly decomposed sulfur present in gaseous oxides preferentially diffused out of the char surface into the bulk gas. The uneven distribution of alkali and alkaline earth metals with respect to char particle size is influential in affecting the sulfation extent on the char surface.