A general method for producing low-sulfur gas and solid fuel is disclosed. Such method involves partial gasification of coal, using steam and an oxygen-containing gas, to produce low-B.t.u. fuel which can be used as a feedstock for power plants and industrial boilers. Also disclosed is a method for simultaneously producing low-sulfur gas, liquid, and solid fuels from coal in a single reaction vessel using a multi-stage fluidized gasification and desulfurization system. Synthesis gas produced in a first stage gas generator by reaction of steam, an oxygen-containing gas, and auxiliary carbonaceous fuel, is reacted with high-sulfur coal in a second stage desulfurization unit forming a solid phase consisting of low-sulfur fuel and a fluid phase consisting of sulfur-containing gaseous and liquid fuels. After disengagement of solid and fluid phases present in the second stage reaction zone, a solid fuel of reduced sulfur content is recovered.