In this study, a double concentric burner burning methane with an annular coaxially-flowing oxidizer was adopted to operate the diffusion flame in lifted flame regime. The effects of coaxial-flow velocity, coaxial-flow composition variation through total and partial replacement of N2, and coaxial-flow oxygen enrichment were experimentally investigated in terms of the resultant changes in the flame stability, and thermal and emission characteristics. Consistent with the triple flame theory, the current stability tests show a linear increase in flame lift height with increasing coaxial-flow velocity and the blowout of lifted flames occurred at constant flame tip height. Replacement of N2 by CO2 in the coaxial-flow deteriorated the flame stability by significantly reducing the threshold coaxial-flow velocity. Due to combustion enhancement that is caused by oxygen enrichment, the threshold coaxial-flow velocity increased and this increase is more significant for the N2-diluted flame than CO2-diluted. Two of the most important NOx formation mechanisms, Zeldovich and Fenimore, were analyzed under the relatively low temperature flame conditions, generally below 1300 °C in this study. Results show that NOx is principally produced via the Fenimore mechanism for both N2- and CO2-diluted flames. NOx productions can be significantly affected by coaxial-flow composition and coaxial-flow velocity. An increase in the velocity of N2-diluted coaxial-flow increases NOx emissions, while a reverse trend occurred, as N2 in the coaxial-flow was replaced or partially replaced by CO2, which is ascribed to the strong combustion-resisting behavior of CO2. For all cases, CO emissions vary in the opposite direction of NOx emissions. Due to the strong thermal and chemical effects of CO2 on combustion in comparison to N2, total or partial replacement of N2 by CO2 results in a steep increase in CO emissions.