In the underground coal gasification (UCG) process, cavity growth with crack extension inside the coal seam is an important phenomenon that directly influences gasification efficiency. An efficient and environmentally friendly UCG system also relies upon the precise control and evaluation of the gasification zone. This paper presents details of laboratory studies undertaken to evaluate structural changes that occur inside the coal under thermal stress and to evaluate underground coal-oxygen gasification simulated in an ex-situ reactor. The effects of feed temperature, the direction of the stratified plane, and the inherent microcracks on the coal fracture and crack extension were investigated using some heating experiments performed using plate-shaped and cylindrical coal specimens. To monitor the failure process and to measure the microcrack distribution inside the coal specimen before and after heating, acoustic emission (AE) analysis and X-ray CT were applied. We also introduce a laboratory-scale UCG model experiment conducted with set design and operating parameters. The temperature profiles, AE activities, product gas concentration as well as the gasifier weight lossess were measured successively during gasification. The product gas mainly comprised combustible components such as CO, CH4, and H2 (27.5, 5.5, and 17.2 vol% respectively), which produced a high average calorific value (9.1 MJ/m3).