Fe and Zr modified hollow ZSM-5 zeolites were prepared and their applications in upgrading of lignite pyrolysis volatiles coupling with methanol to light aromatics were investigated. The results demonstrated that hollow zeolites with larger voids and shorter diffusion length favored the production of light aromatics. Adding Fe and Zr into ZSM-5 zeolites further enhanced BTX yields due to the synergism between metals and acid sites for promoting hydrodeoxygenation reactions. Meanwhile, Zr-Fe/HZ-5 catalyst with increasing Lewis acid sites facilitated methylation leading to high selectivity of xylene under methanol atmosphere. Moreover, diffusion behaviors of xylene were quantified. Higher self-diffusion coefficient of molecules in hollow zeolites led to the formation of less coke, while the incorporation of Fe and Zr promoted the formation of catalytic coke due to the increase of alkylation resulting in partial conversion of BTX into PAHs on external surfaces although the total coke yields were further decreased.