The octagonal tangentially fired boiler can be utilized for burning lignite with high moisture. Co-firing biomass in an octagonal tangential boiler is considered a promising approach. A numerical simulation is carried out in this study to analyze the impact of flue gas recirculation (FGR) and the biomass blending ratio on heat and mass transfer in an octagonal tangentially fired boiler. When the FGR rate increases from 0 to 30%, the maximum temperature in the boiler decreases from 2162.8 to 2106.5 K. Simultaneously, the average temperature of the center longitudinal section decreases from 1589.0 to 1531.9 K. The maximum fluctuation of the outlet flue gas temperature remains within 10.9 K for the four calculated working conditions. Consequently, the efficiency of the boiler is basically unchanged. However, the flue gas temperature at the furnace outlet decreases significantly from 1605.9 to 1491.9 K. When the biomass blending ratio increases from 0 to 20%, the mean temperature of the primary combustion zone decreases from 1600.5 to 1571.2 K.