Moderate or Intense Low-oxygen Dilution oxy-fuel (MILD-oxy) combustion presents a practical approach toward achieving carbon neutrality with low-NOx emissions, and its combustion process is highly affected by O2 and temperature levels in the reactant mixture. This paper numerically evaluates the effects of co-flow O2 (XO2) and temperature (Tcof) on the combustion regimes and fuel-NO mechanism of CH4/NH3 jet diffusion flames in hot O2/CO2 co-flow, in which XO2 and Tcof vary from 3% to 30% and from 1300 K to 2100 K, respectively. Results show that MILD-oxy combustion can be fully established for all Tcof levels when XO2 ≤ 21%, whereas a higher Tcof is required for maintaining MILD regime at XO2 ≥ 24%. Otherwise, the maximum temperature rise exceeds the auto-ignition temperature and combustion regime will shift to high temperature combustion (HTC). From the physical perspective, the promoted Tcof level facilitates the achievement of MILD regime in a large reaction zone by greatly enhancing the specific heat of co-flow and weakening the entrainment of O2 into the mixing layer. Meanwhile, reducing XO2 in co-flow remarkably inhibits the fuel combustion and hence fulfils MILD combustion in the chemical view. Increasing XO2 and Tcof levels facilitate NH2 + OH ↔ NH + H2O because of high content of OH radical, while depleting O radical and blocking NH2 + O ↔ HNO + H. Fuel-NO formation routes with HNO as the N-containing intermediate via NH3 → NH2 → HNO → NO and NH3 → NH2 → NH → HNO → NO are weakened and lead to the decrease in NO emission index.