A new combustion method, an Improved Three-Stage Combustion (ITS) system, has already been proposed for simultaneous control of NOx and N2O emissions in bubbling fluidized-bed coal combustion. This research aims to clarify optimum operating conditions experimentally and to simulate the reactions by a simple model based on one-dimensional gas flow. It has confirmed from experimental work using a bench-scale combustor that two important factors are existent in ITS operation, in addition to the maximum temperature in the freeboard of bubbling bed. The optimum value of the ratio of primary air to total air for coal (main fuel) combustion and that of the stoichiometric ratio of secondary air to secondary (additional) fuel were, respectively, 0.8 similar to 0.85 and approximately 0.7. If we maintain the above values and a maximum freeboard temperature of 925 degrees C in ITS operations, it becomes possible to reduce N2O emission by 1/10 and NOx emission by 2/5 in comparison with those emission levels in single-stage combustion. Modelling work has also confirmed that, in ITS operations, the N2O and NOx reduction in the freeboard is brought about by gas-phase reactions under a reducing atmosphere and high temperature, in addition to gas-solid and heterogeneous catalytic reactions for NOx reduction on the surface of char particles.