A method of drying brown coal in which the brown coal is pelletized before the drying into pellets of 2 to 5 mm dia. by a wet pelletizing process making use of the water contained by the coal itself as the binder. The brown coal in the form of dried pellets has a larger bulk density than the brown coal in the form of fine powders which are obtained when the brown coal after the exploitation is directly dried, and, therefore, contributes to the reduction of the transportation cost. In addition, the dried brown coal in the form of pellets can be handled and transported in quite an easy manner, as compared with the case of powdered brown coal. Further, thanks to the improved ventilation afforded by the gaps between the pellets, the possibility or chance of undesirable spontaneous combustion is greatly reduced.