Abstract Selective use of microorganisms for coal bioprocessing offers many possibilities such as mitigation of desulfurization conditions, enhanced liquefaction yields and production of coal with low-ash contents. In these investigations, axenic as well as soil-isolated bacterial cultures were tested for their coal bioprocessing potential. Pure cultures of Pseudomonas putida and Pseudomonas flourescens grown on benzoate were found unable to remove sulfur from bituminous raw coals (KY#211). Bituminous coals, when treated with N-methyl-2-pyrrolidine (NMP), also remained unaffected by these microorganisms. The bacterium Oil-2, which was isolated from an oil-soaked soil near an oil-well, demonstrated unequivocal ability to degrade dibenzothiophene (DBT). Its capability to degrade different organic sulfur compounds was found to be in descending order from DBT > DBT-sulfone ⪢ thiophene. Oil-water emulsions containing crude oil and H-coal (liquefied coal) were tried for desulfurization. A significant proportion (65–71%) of organic sulfur, present in crude oil-water emulsions, was found to be solubilized by the isolate Oil-2 and benzoate-grown Pseudomonas putida. Mass balance calculations revealed that 47% of the solubilized sulfur was recoverable as sulfate. Effect of pre-treatment of bituminous coal with a fungus Poria placenta, on desulfurization by the archaebacterium Sulfolobus brierleyi was also investigated and found to have facilitated the process to some extent. Cell-free extracts of Sulfolobus brierleyi were found to have an insignificant effect upon desulfurization of these coals.