A comprehensive model, previously developed and tested for prediction of behavior of continuous fluidized bed combustors is extended to incorporate NOx formation and reduction reactions and applied to the simulation of Middle East Technical University (METU) 0.3 MW Atmospheric Bubbling Fluidized Bed Combustor (ABFBC) burning lignites with high Volatile Matter/Fixed Carbon (VM/FC) ratios in their own ashes. Favorable comparisons are obtained between the predicted and measured temperatures and concentrations of gaseous species along the combustor. Results show that determination of partitioning of coal nitrogen into char-N and volatile-N, char combustion rate, and amount of volatile nitrogen released along the combustor are found to be the most important parameters that affect NO formation and reduction in bubbling fluidized bed combustors.