Coal formation dewatering at a site in the Powder River Basin was associated with enhanced potential for secondary biogenic methane determined by using a bioassay. We hypothesized that dewatering can stimulate microbial activity and increase the bioavailability of coal. We analyzed one dewatered and two water-saturated coals to examine possible ways in which dewatering influences coal bed natural gas biogenesis by looking at differences with respect to the native coal microbial community, coal-methane organic intermediates, and residual coal oxidation potential. Microbial biomass did not increase in response to dewatering. Small Subunit rRNA sequences retrieved from all coals sampled represented members from genera known to be aerobic, anaerobic and facultatively anaerobic. A Bray Curtis similarity analysis indicated that the microbial communities in water-saturated coals were more similar to each other than to the dewatered coal, suggesting an effect of dewatering. There was a higher incidence of long chain and volatile fatty acid intermediates in incubations of the dewatered coal compared to the water-saturated coals, and this could either be due to differences in microbial enzymatic activities or to chemical oxidation of the coal associated with O2 exposure. Dilute H2O2 treatment of two fractions of structural coal (kerogen and bitumen + kerogen) was used as a proxy for chemical oxidation by O2. The dewatered coal had a low residual oxidation potential compared to the water-saturated coals. Oxidation with 5% H2O2 did increase the bioavailability of structural coal, and the increase in residual oxidation potential in the water saturated coals was approximately equivalent to the higher methanogenic potential measured in the dewatered coal. Evidence from this study supports the idea that coal bed dewatering could stimulate biogenic methanogenesis through partial oxidation of the structural organics in coal once anaerobic conditions are restored.