This study aims to clarify the influence of moisture on the formation of fine particulate matter during coal combustion. Coal samples (A and B) with different moisture contents were pyrolyzed and combusted in a lab-scale drop tube furnace under N-2 and air atmosphere, respectively. A coalescence-fragmentation model was modified to evaluate the release of included minerals during coal combsution. The results indicate that a high content of moisture in the raw coal caused the loss of char yield during coal devolatilization due to the steam-gasification between coal carbonancous matter and moisture. A large amount of cracks were formed on the surface of char particles likely due to the rapid vaporization of pore moisture and fragmentaion of char. Existence of inherent moisture in the coal promoted the formation of PM1.0-2.5, which was probably caused by the release of included minerals from char matrix during devolatilization. The effect of free moisture in raw coal on the PM emission was insignificant. The results from the model calculation suggested that the included minerals of 0.15% in coal A and 0.04% in coal B were released into the surrounding gas, and in turn caused the increase of PM1.0-2.5 emission. An increase in drying temperature and/or prolonging the drying time to reduce the inherent moisture content was suggested to prevent the emission of inhalable particulate matters during low-rank coal combustion.