As one of the important unconventional resources, coalbed methane (CBM) can mitigate energy shortage issue, and its efficient exploitation has received widespread attention globally. The development of CBM is of great significance to coal mine safety and energy supply. CBM reserve evaluation provides a basis for selecting development zones and determining development strategies. However, most existing CBM reserve evaluation methods do not consider the effects of dissolved gas, free gas and the difference between initial reservoir pressure and critical desorption pressure. Thus, the predicted results usually deviate from the actual reserve. In this paper, firstly, the material balance equation (MBE) for early dewatering stage considering the effect of stress sensitivity on porosity is established, and the initial free gas and dissolved gas reserves of undersaturated CBM reservoirs can be obtained. Secondly, the MBE for gas desorption stage is derived, in which the effects of stress sensitivity, matrix shrinkage and dissolved gas are considered. So the original gas in place (OGIP) of CBM reservoirs can be solved. Next, the correctness and rationality of MBEs for early dewatering stage and gas desorption stage are verified against King's MBE method and CBM dynamic analysis software. Finally, this method is applied to actual production wells. The results show that in early dewatering stage, 1-S-W vertical bar alpha (p) over barp/c(p)+alpha S(wi)c(w) (z) over bar - (p(i) - (p) over bar) ((p) over bar/(z) over bar and (WpBw - W-e)alpha(p) over bar/(z) over bar + G(p) p(sc)(T)/Z(sc)T(sc) have a linear shape, and the control area of CBM reservoir can be calculated based on the slope of the straight line. In addition, the ratio of the intercept to the slope of the straight line can be used to calculate the initial free gas and dissolved gas reserves of undersaturated CBM reservoirs. During gas desorption stage, p/Z* and G(p) have a linear relationship. OGIP of CBM reservoirs can be obtained by the ratio of y-intercept to the slope of the straight line. Using gas and water production data provided by CBM dynamic analysis software, the reserves of undersaturated CBM reservoirs evaluated by the proposed method are in good agreement with those from CBM dynamic analysis software, which proves that the proposed material balance equations and corresponding methods are reasonable and reliable. The material balance equations and methods presented in this paper take into account the effects of various factors such as the difference between initial reservoir pressure and critical desorption pressure, pore compressibility, water compressibility, coal matrix shrinkage, dissolved gas, and free gas. The proposed reserve calculation methods for undersaturated CBM reservoirs can provide an important basis for selecting dominant production area, determining well spacing and guiding development policy.