Six chars, such as four coal chars of varying rank and two chars derived from acid-washed coals, were prepared by fast pyrolysis using a drop-tube furnace at 1323 K to study the gasification reaction mechanism when both CO2 and H2O were present using a thermogravimetric analyzer and a fluidized-bed reactor at the atmospheric condition at 1173-1273 K. It was found that the char gasification rate in the mixtures of CO, and H2O was obviously lower than the sum of the two rates of the char individually reacting with CO2 or H2O but higher than the rate of each individual reaction. CO2 and H2O competed for the same active sites on the surface of char. The char H2O reaction was independent of the char CO2 reaction, while the char CO2 reaction was inhibited by the char H2O reaction. With the increase of the coal rank and temperature, the inhibition decreased. On the basis of the results, a new mechanism was suggested to describe the competition between the CO2 adsorption and the H2O adsorption. Moreover, a detailed mathematical model based on the derived mechanism was used to predict the performance of an axisymmetric, entrained-flow gasifier. Comparisons between values predicted by the model and experimental study of the literature had shown good agreement.