In this paper, collision of two identical evaporating or burning droplets is simulated in coalescence regime. To do this, based on Lee's two phase flow framework a lattice Boltzmann scheme is proposed for evaporation and combustion simulation of liquid fuel droplet. The effect of evaporation rate on collision outcome is investigated by changing Stefan number for various Weber numbers. Variation of droplet kinetic energy and viscous energy loss as well as changes in droplet oscillations after coalescence is studied for different evaporation rates. Comparing collision of evaporating and non-evaporating droplets with the same surface tension, revealed that the evaporation process reduces the surface tension effect. An effective surface tension is introduced to measure the effect of evaporation rate on collision process. The effective surface tension is a function of Stefan number, Weber number and time. It decreases by increasing Stefan or Weber number but increases with time. For collision of burning droplets, it was revealed that the combustion increases the kinetic energy of droplets before collision. Intensified velocity vortexes, which is made by the high temperature flame zone, is most likely the cause of droplet energy increment before collision. (C) 2017 Elsevier Ltd. All rights reserved.