Texas lignites are a low-Btu, high-ash and moderately high-sulfur fuel that can be readily upgraded before combustion using physical and microbial desulfurization technology. Although physical and chemical processes and some microbial processes are effective in removing pyritic sulfur, they are ineffective for removing organic sulfur. Microbial processing of Ter,as lignite with sulfur content of up to 1.5 wt.% was investigated using laboratory shake-flask experiments. Organisms of the genus Thiobacillus ferrooxidans, Leptospirillum ferrooxidans and Pseudomonas putida were investigated. It was found that up to 77% of the sulfur compounds present in the Texas lignite with more than 90% of the pyritic sulfur could be removed by the use of these microbes. Texas lignite samples were pulverized to pass through 149-mu m sieve. Thiobacillus ferrooxidans reduced up to 54% of the total sulfur and 78% of the pyritic sulfur in 14 days and Leptospirillum ferrooxidans removed up to 41% and 60%, respectively. A mixed culture of these two bacteria was also studied for sulfur removal. The lignite was retreated with P. putida which further removed 50% of the total sulfur in 7 days. P. putida could successfully remove up to 37% of the organic sulfur in 7 days.