To further upgrade Loy Yang lignite via microwave irradiation treatment, activated carbon with different particle size fractions (ACP1, <300 μm or ACP2, 1–1.17 mm) was mixed with lignite. ACP1 was not removed from the upgraded samples (the first type of samples, S1), whereas ACP2 was separated (the second type of samples, S2). All samples were characterized by total acidity, pore size distribution, equilibrium water content (EWC), and combustion characteristics. The results showed that total acidity decreased with increasing ACP1 or ACP2 and total acidity of S1 was higher than that of the corresponding S2. Furthermore, EWCs of the upgraded samples were considerably lower than that of raw lignite. EWC of S1 first increased and then decreased with increasing ACP1 content; this is due to the competition between the obvious increase in pores and decomposition of total acidity. EWC of S2 decreased as ACP2 content increased; this is because of the evident decrease in total acidity. The reactivity for the sample with an 8% addition of ACP1 was the lowest because of the combined effects of the decomposition of total acidity and the maintaining of ACP1, whose reactivity is low.