The characteristics of hydrochars of cotton stalk (CS) and hydrochar pellets were investigated in this paper to obtain high quality biomass fuel. The differences between the characteristics of hydrochars at different temperatures (180–300 °C) and reaction times (1–8 h) were analysed by mass yield, energy yield, proximate analysis, element analysis and higher heating value (HHV). The content of carbon and HHV of the hydrocars reached 51.18–73.94 wt% and 19.66–25.68 MJ/kg. FTIR and XPS indicated dehydration and condensation exist in HTC. SEM showed the generation of carbon microspheres. There was a higher energy consumption of hydrochars during pelletization, but the pellets formed from hydrochar had a higher relaxation density (1.06–1.21 g/cm3) and compressive strength (6.84–8.90 Mpa) than the CS pellets. The integrated combustion characteristics index (Sn) of 180-4 hydrochar pellets were better due to the higher (dm/dt)max value. The combustion kinetic parameters were determined by the Kissenger-Akahira-Sunose (KAS) and Flynn-Wall-Ozawa (FWO) methods. The results showed that the change tendency of the Eα values was consistent, the average activation energy (Eα) was very similar, and the average correlation coefficient (R2) was higher than 0.9 in all samples.