Microorganisms in coal bed can potentially convert coal to natural gas. A number of methods, including nutrient injection and microbial introduction, have been used to enhance coalbed methane (CBM) production. However, the recalcitrant composition and hydrophobic character of coal greatly limit its bioavailability, thus limiting the coal-to-methane conversion efficiency. Ubiquitous iron-bearing clay minerals may be able to improve the bioavailability of coal through oxygenation of structural Fe(II). However, its effect has remained unknown. The objective of this study was to use an Fe(II)-rich clay mineral (nontronite) to oxidize coal and to increase its bioavailability through production of strongly-oxidizing hydroxyl radicals. A coal sample from an underground Dahuangshan coal mine of the southern margin of Junggar Basin of Xingjiang, China was oxidized by hydroxyl radicals generated upon oxygenation of reduced nontornite. The pretreated coal sample was then anaerobically incubated with a methanogenic consortium to assess methane production potential. During the oxidation process, 28–46 mg/g dissolved organic carbon was released from the coal sample as a result of oxidation of coal by hydroxyl radicles. When the condition switched to anoxic for 62 days, the coal sample pre-treated with reduced nontronite produced much more methane than the one without pre-treatment (164 μmol versus 40 μmol methane per gram of coal). During this stage, structural Fe(III) in nontronite was reduced to Fe(II), which can be used in the next redox cycle to sustain production of hydroxyl radicles and oxidation of coal. A potentially low-cost scheme for microbial CBM enhancement is proposed: injection of reduced iron-bearing clay mineral, injection of air/O₂, and methane production by indigenous microbial community. Cycling of oxidation/reduction of structural iron in clay mineral can be modulated by injection and consumption of air, and sustainable production of methane may be expected. Overall, this study demonstrated that treatment by iron-bearing clay mineral is a potential method to improve methane production from coal.