Abstract Permeability of coal seams is one of the key factors for the success of coalbed methane (CBM) developments. It is dominated by cleat permeability in coal, which is very sensitive to the change of effective stresses. The coal matrix shrinkage due to methane production also influences cleat permeability. Using an explicit-coupling simulation method, which simultaneously simulates multiphase fluid flow and coal deformation, and a coupling permeability model, which considers the effects of the effective stress change and coal matrix shrinkage on cleat permeability, the sensitivity of CBM production to ten engineering, geologic, and coal intrinsic parameters such as cleat permeability, cleat spacing, well control area, depth, and methane content, etc., were studied in this paper. These parameters are stress and matrix shrinkage related parameters or have significantly influences on CBM production identified from previous studies. The production rate and final gas recovery from conventional simulations and coupling simulations are also compared. Of the parameters studied, permeability, cleat spacing, and in situ stresses were found to be the most sensitive parameters that influence CBM production. Medium sensitivity was found for the coefficient of matrix shrinkage, the Langmuir volume, pressure gradient, and well control area, while the least sensitive parameters included Poisson's ratio, Young's modulus, and the Langmuir pressure. Introduction With reserves of 84 ˜ 262 trillion m3 (2,980 ˜ 9,260 trillion ft3) all over the world(1), coalbed methane (CBM) has come to represent a real gas supply to meet current and future natural gas demands. In the United States, CBM accounted for 10% of dry gas reserves and 8% of dry gas production in 2003(2). The worldwide development of CBM is also accelerating in many other countries such as China, Canada, and Australia. The success of CBM developments depends on many factors, but specific properties of a coal seam remain the fundamental controlling factor. Many people have investigated the effects of coal seam properties on CBM production and recovery(3–6). The studies of Sawyer et al. indicated that cleat (fracture) permeability and relative permeability, not gas diffusion, control long-term productivity, and that optimum well spacing also depends on cleat permeability(3). Reid et al.'s results showed that permeability, initial desorption pressure, and drainage area are the most important reservoir parameters for CBM production(4). Young et al. pointed out that permeability, well spacing, and the degree of coal saturation have the greatest impacts on the long-term performance of CBM wells(5). A completed parametric study by Roadifer et al. illustrated that for coal-only reservoirs (without adjacent sand layers), the five parameters having the most impact on the peak gas rate are, in order of highest to lowest, permeability, free gas saturation, degree of saturation of the coal, damage skin factor, and thickness(6). The results of the above-mentioned studies clearly indicate that cleat permeability is likely the most important factor for CBM production. However, in all these investigations, permeability was considered as a constant.