Nitrogen-transfer mechanism in the oxidation process of lignite is simulated by ReaxFF molecular dynamics. The ReaxFF simulation results show good agreements with previous experimental results. Transferring nitrogen to gas phase is a stepwise dehydrogenation/oxygenation process. O2 favors the decomposition of stable nitrogen-containing heterocycle in lignite. Oxidizing nitrogen-containing radicals or molecules to stable NO avoids their secondary reactions with lignite.