The conversion of lignite to caking coal via hydro-modification was conducted in a subcritical water-CO system, and the effects of the hydro-modification on the coal structure were investigated by Soxhlet extraction, Thermogravimetry (TG), Fourier transform infrared spectroscopy (FTIR) and Electron spin resonance (EPR). The results indicate that the caking property of lignite can be clearly developed and that the caking index (G(RI)) of modified coal increases from 0 to 96. The active hydrogen (H-.) produced from the water gas shift reaction (WGSR) provides an important hydrogen source for the hydro-modification of coal, and the G(RI) strongly depends on the variation of CO conversion (X-CO). The optimum G(RI) is registered at X-CO values of 36.48-43.48%. The cleavage of bridge-bonds and side-chains improves the mobility of molecules in lignite, which promotes the rearrangement of aromatic lamellar to generate polyaromatic free radicals that could be stabilized by H-. to form plastic species. The moderate decomposition of lignite and the appropriate amount of active hydrogen (H-.) favor an increase in the extraction yield of preasphaltene, which correlates well with the caking index (GRI), allowing for the development of a plastic stage the modified coals. (C) 2015 Elsevier Ltd. All rights reserved.