Abstract Field experiments and laboratory studies have shown that swelling of coal takes place upon contact with carbon dioxide at underground pressure and temperature conditions. Understanding this swelling behavior is crucial for predicting the performance of future carbon dioxide sequestration operations in unminable coal seams conducted in association with methane production. Swelling is believed to be related to adsorption on the internal coal surface. Whereas it is well established that moisture influences the sorption capacity of coal, the influence of water on coal swelling is less well-defined. This paper presents the results of laboratory experiments to investigate the effect of moisture on coal swelling in the presence of carbon dioxide, methane and argon. Strain development of an unconfined sample of about 1.0–1.5 mm 3 at 40 °C and 8 MPa (and at other pressures) was observed in an optical cell under a microscope as a function of time. Both air dried and moisturized samples were used. Results confirmed different swelling behaviors of coal with different substances: carbon dioxide leads to higher strain than methane, while exposure to argon leads to very little swelling. The experiments on moisturized samples seem to confirm the role of moisture as a competitor to gas molecules for adsorption sites. Adsorption of water could also explain the observed swelling due to water uptake at atmospheric pressure. A re-introduction of carbon dioxide, after intermediate gas release, results in higher strains which indicate a drying effect of the carbon dioxide on the coal. The results of this study show that the role of water cannot be ignored if one wants to understand the fundamental processes that are taking place in enhanced coalbed methane operations.