The effective extraction radius of borehole is the main parameter for determining the design and layout for coalbed methane extraction. This paper is aimed at the problem that the criteria and calculation methods for the effective extraction radius of coal seams are not comprehensive. With Wudong Coal Mine in China taken as an example, the critical gas pressure (0.441 MPa) for the calculation of effective extraction radius is first defined. Next, the gas seepage unit model around the borehole is developed, and the theoretical mathematical expression to calculate the effective extraction radius is derived. Then, the numerical simulation of gas extraction is carried out through a computational fluid dynamics program, and the effective extraction radius is obtained numerically. Furthermore, the influence of original gas pressure, borehole diameter, and negative pressure of gas extraction on gas extraction is analyzed. Finally, the results from the theoretical calculation and numerical simulation are validated by the field engineering measurement and the average relative error is small (less than 10%). The results indicate that the effective extraction radius has a linear relationship with the extraction time. Moreover, it is found that the original gas pressure is the main factor affecting the effective extraction radius and the effective extraction radius is proportional to the borehole diameter and negative pressure through analysis. Therefore, the above findings can provide a theoretical basis for determining parameters such as borehole spacing and extraction time of gas extraction in coal mines.