The behaviors of volatile combustion and ignition of lignite coal were assessed on a concentrating light heating platform using hydroxyl-Planar laser-induced fluorescence (OH-PLIF) over a range of 21–60% O2 in both N2 and CO2 diluent gases. The results indicated that when the O2 concentration was below 40%, substituting CO2 for N2 delayed the ignition delay time (tign). This was evident as no ignition occurred in the 21% O2/CO2 mixture, and a nearly 1.0 s difference in tign emerged when substituting CO2 for N2 in 30% and 40% air atmospheres. Additionally, the weaker flame luminosity and the shorter volatile flame duration time (tvol) were also observed in O2/CO2 compared with that in O2/N2. Correspondingly, a significantly lower OH signal intensity was observed in O2/CO2 compared to O2/N2, which was primarily due to physical and chemical effects of CO2. Firstly, the higher heat capacity and lower diffusion rate of O2 in O2/CO2 leads to a lower volatile release rate and decreasing flame temperature, as evidenced by the closer proximity of the flame front to the coal particle surface. The lower flame temperature and volatile release rate would reduce the number of hydrocarbon molecule (RH) and the reaction rate of RH→hydrocarbon radical (R) + H, leading to a decrease in the concentration of OH radical from the reaction: H + O2→OH + O. Secondly, CO2 participates directly in H + OH + three-body (M)→H2O + M reaction, competing with the primary OH formation pathway, H + O2→OH + O, for H radicals, thus suppressing the OH generation. However, when O2 concentration exceeded 40%, the tign was shorter in O2/CO2 by about 1.2–1.4 s than in O2/N2 with the same O2 concentration. Simultaneously, compared to the O2/N2, similar flame luminosity and tvol were observed in the O2/CO2. An obvious increase in OH intensity was also observed in O2/CO2. With higher O2 concentrations in the O2/CO2, the absorption and emission radiation characteristics of CO2, increased O2 diffusivity and the decreased specific heat capacity in the O2/CO2 gas mixture, synergistically facilitate temperature rise and volatile release, which promotes the generation of RH, and then increases the H concentration due to the reaction RH→R + H. This would lead to a substantial increase in concentration of OH produced by the reaction H + O2→OH + O, which was detected by OH-PLIF.