An investigation of the thermal drying of lignite has been carried out, by using an indirect heat pilot rotary drum. The process aims at the production of dry lignite and clean steam as part of a gasification procedure. Both flighted and bare drum modes have been employed. Temperature profiles along the dryer length, the amount of evaporation (moisture conversion) and the solids residence time distribution (RTD) were measured. A non-isothermal model was tested under three different regimes of solids flow. Model integration, by taking account of experimental amount of evaporation at dryer exit and temperature profiles along the dryer length, has been utilized in the validation of drying kinetics and heat transfer correlations. Model predictions compare satisfactorily with the operating data of an indirect heat industrial lignite dryer. Overall heat transfer coefficients of the pilot rotary dryer were found to agree well with those reported for direct heat dryers.