We have developed a new coal-permeability model for uniaxial strain and constant confining-stress conditions. The model is unique in that it explicitly considers fracture-matrix interaction during coal-deformation processes and is based on a newly proposed internal swelling stress concept. This concept is used to account for the impact of matrix swelling (or shrinkage) on fracture-aperture changes resulting from partial separation of matrix blocks by fractures that do not completely cut through the whole matrix. The proposed permeability model is evaluated using data from three Valencia Canyon coalbed wells in the San Juan Basin, where increased permeability has been observed during CH4 gas production, as well as using published data from laboratory tests. Model results are generally in good agreement with observed permeability changes. The importance of fracture-matrix interaction in determining coal permeability, demonstrated in this study using relatively simple stress conditions, underscores the need for a dual-continuum (fracture and matrix) mechanical approach to rigorously capture coal-deformation processes under complex stress conditions, as well as the coupled flow and transport processes in coal seams.