Neyveli lignite and Assam coal were subjected to biodegradation using bacteria and microfungi in the solid state fermentation technique. Neyveli lignite was found to show more biosolubilization than Assam coal. Neyveli lignite was also subjected to biodegradation using liquid state fermentation technique employingcorynebacterium renale, Pseudomonas striata, Escherichia coli, spherotilus natans, streptococcimicrofungi. Solid state fermentation technique yielded better biosolubilization results than liquid state fermentation technique. Extractability of biodegraded coal in chloroform was enhanced. The IR spectral studies indicated oxidation and demineralization of microbially treated coals.