Pakistan is the world largest lignite bearing country in the world due to the Thar coal reserves. Sulfur contained in this coal need to be removed prior to combustion. Oxidative alkali leaching in dissolved oxygen technique was used to remove the sulfur from Thar coal. This method removed enough all three types of sulfur; about 90% pyretic sulfur, 78% organic sulfur and 50% sulfate sulfur and more than 82S% of total sulfur removal was achieved. Effect of various reaction parameters were observed, it was investigated that reaction time and partial pressure of oxygen has positive effect on the desulfurization, higher the reaction time and oxygen partial pressure higher the degree of desulfurization, also the desulfurization increased with increase in reaction temperature and alkali concentration till some optimum value and then decreases with further increase in value of temperature and concentration of alkali, although desulfurization was observed maximum with minimum particle size. Coal was also characterized with Thermogravimetric Analysis (TGA) and Testo smoke number to investigate the combustion behavior of processed coal. It was observed that combustion properties of processed coal were improved and black smoke in processed coal was reduced.