Permeability and pore pressure are critical parameters in the evaluation of a coalbed methane (CBM) project. Coal permeability is particularly problematic, as it is highly stress dependent and estimates made from cores generally do not adequately reflect in situ reservoir conditions. Pressure buildup, injection falloff and more often slug tests have been used to determine in situ permeability in coal. However, buildup tests are costly, time consuming, and cannot be applied effectively in underpressured reservoirs; slug tests require an accurate estimate of wellbore storage effects. Similar to buildup tests, injection falloff tests are very time consuming and costly because of the longer shut-in times. Also, if fracture pressure is exceeded during an injection-falloff test, conventional analysis can give erroneous results. This paper presents a more effective method for determining pore pressure and permeability in coals using a diagnostic fracture injection testing technique. A diagnostic fracture injection test (DFIT) is a small-volume, cost-effective, and short-duration test that has been used successfully in tight gas sands in the Piceance and other basins. The test consists of (1) a G-function derivative analysis to identify the leakoff mechanism and closure, (2) a calibrated before-closure analysis using modified Mayerhofer method to determine the permeability, and (3) an after-closure analysis to estimate pore pressure and permeability. The uniqueness in applying this test in coals is that both the before- and after-closure analysis can be utilized where pseudo-radial flow is not dependent upon the fracture half-length. The technique works because the permeability in coals is high enough that after-closure pseudo-linear and pseudo-radial flows are normally observed with an extended shut-in. Once pseudo-radial flow is observed, estimating pore pressure and transmissibility becomes straightforward and provides calibration for the before-closure analysis. Hundreds of diagnostic fracture injection tests have been conducted in all the CBM basins in the rockies and in Canada with remarkably consistent results. Examples are provided from San Juan basin and Canadian coals where diagnostic injection tests have been applied successfully for various operators. DFIT's have been applied successfully in other CBM basins like Sand Wash, Greater Green River, Piceance, and (western) Powder River basin. Introduction Pressure-transient testing of CBM wells has developed rapidly in the past fifteen years. Interference testing in coals was reported by Koenig and Stubbs.1 Mavor and Saulsberry2 wrote an entire chapter that dealt with the testing of coalbed methane wells in detail. Seidle et al.3 addressed the issues relating to testing new coal wells. Shu et al.4 estimate coal permeability by history matching a slug test and they also report the data analysis from packer tests performed at one of the BHP Steel Colliery sites. Pressure-transient analysis with sorption phenomena for single-phase gas flow in coal seams was addressed by Anbarci and Ertekin5. Jochen et al.6 studied existing analytical models for estimating permeability in CBM reservoirs. They stress the need to use a reservoir simulator in case of desorption in the development of CBM reservoir description.