In this work, the conventional combustion in O2/Ar and O2/CO2 atmospheres at temperatures of 700–1000 °C and isotopic tracing experiments at 700–800 °C were conducted respectively in a micro fluidized bed reactor to clarify the conversion characteristics of lignite char and influence mechanism of elevated CO2 concentrations. The isotopic method employing C18O18O provides an intuitive insight into the CO2 gasification behavior by tracking the evolution of the 18O atom throughout the oxy-fuel combustion. The results reveal that char conversion rate significantly reduces when the atmosphere is switched from O2/Ar to O2/CO2 at low temperature range (e.g. 700–800 °C), primarily caused by thermo-physical properties of CO2. However, at higher temperature range (e.g. 950–1000 °C), the C-O2 reaction is limited by the external O2 diffusion and the C-CO2 reaction contributes to the carbon consumption, resulting in a higher combustion rate, especially at O2-deficient conditions. The presence of the atomic 18O in the product C18O16O originating from C18O18O confirms that CO2 is indeed involved in the whole oxy-fuel combustion process and the overall reaction could be described as C + C18O18O+16O16O → 2C18O16O. Besides, total contributions to carbon conversion by the C-CO2 reaction decrease as O2 concentrations and particle sizes increasing.