Shengli (SL) lignite was thermally treated by heating at 200-350 degrees C in an effort to reduce the number of O-containing functional groups and water present. The presence of carboxyl groups, phenolic hydroxyl groups, and methoxy groups was characterized using a chemical titration method. The moisture holding capacity (MHC), wettability, and zeta potential of the SL lignite were measured before and after the low-temperature heat treatment. The results revealed that the main reactions that occurred below 350 degrees C were decarboxylation and dehydration, corresponding to the decomposition of more than 60% of the carboxyl groups and phenolic hydroxyl groups. SL lignite treated at 350 degrees C displayed an approximately 50% reduction in its MHC. The O-containing functional groups (the carboxyl groups, in particular) played an important role in water adsorption, indicating that the formation of the hydrogen bond between the O-containing functional groups and water contributed most significantly to the water adsorption process. The contact angle decreased as the number of hydrophilic sites decreased as a result of the decomposition of O-containing functional groups. The zeta potential of the SL lignite decreased significantly as the concentration of O-containing functional groups decreased. MHC was successfully correlated with the presence of O-containing functional groups and the quantity of surface area without oxygen groups, as follows: MHC = 2.655[-COOH] + 2.912[-OH] + 0.209[-OCH3] - 3.321S(non-O) + 1.341, where Snon-O, for the lignite is defined as Snon-O = S-i(C-i/C-0), where S-i is the surface area of the lignite and C-i, and C-0 are the total contents of O-containing functional groups in the heat-treatment or as-received lignites.