In oxy-fuel combustion, fuel is combusted in a mixture of O₂ and recycled flue gas, i.e. the N₂ is replaced by CO₂ with the O₂ supplied from an air separation unit. The resulting gas consists largely of steam and CO2, which would be ready for sequestration when dried. In this work, the rate of reaction of particles of lignite char, typically 1200 μm diameter, in a fluidised bed reactor was determined using mixtures of O₂ with either CO₂ (“oxy-fuel”) or N₂. A universal exhaust-gas oxygen (UEGO) sensor enabled rapid measurements of the oxygen partial pressures in the off-gas, representing a novel application of this type of sensor. It was found that the rate of combustion of the particles in oxy-fuel is much more sensitive to temperature than in the equivalent O₂ and N₂ mixture. This is because for bed temperatures >∼1000 K particle combustion in mixtures of N₂ and O₂ is rate controlled by external mass transfer, which does not increase significantly with temperature. In contrast, using oxy-fuel, as the temperature increases, gasification by the high concentrations of CO₂ present becomes increasingly significant. At low temperatures, e.g. ∼1000 K, rates of combustion in oxy-fuel were lower than those in mixtures of O₂ and N₂ containing the same mole fraction of O₂ owing, primarily, to the lower diffusivities of O2 in CO₂ compared to O₂ in N₂ under conditions at which external mass transfer is still a significant factor in controlling the rate of reaction. At higher temperatures, e.g. 1223 K, oxy-fuel combustion rates were significantly higher than those in O₂ and N₂. The point at which oxy-fuel combustion becomes more rapid than in mixtures of O₂ and N₂ depends not only on temperature but also on the ratio of O₂ to CO₂ or N₂, respectively. A numerical model was developed to account for external mass transfer, changes in the temperature of the particle and for the effect of gasification under oxy-fuel conditions. The model confirmed that, at high temperatures, the high concentration of CO₂ at the surface of the burning particle in the oxy-fuel mixture led to an increase in the overall rate of carbon conversion via CO₂ + C → 2CO, whilst the rate of reaction with O₂ was limited by mass transfer. Good agreement was observed between the rates predicted by the numerical model and those observed experimentally.