To reduce CO2 emissions from thermal power, gradual substitution of coal by ammonia has been widely considered. However, co-firing of ammonia and coal has the risk of increasing NOx emissions. Moreover, the combustion of hydrogen-rich carrier ammonia can generate H2O, which affects the conversion paths of N in ammonia-N/coal-N. Therefore, it is necessary to study the oxidation mechanism of N during ammonia-coal co-combustion under an H2O atmosphere. In this study, the NH/char/O2 co-combustion system, in the presence of OH, was constructed by density functional theory. The molecular mechanism of the oxidation of amino groups into NO, HNO, and N2O, with the participation of OH, was explored. Combined with wave function analysis, the promoting effect of OH on the oxidation of ammonia-N and coal char-N into N oxidation products was clarified. The energy barrier values of ammonia oxidation to HNO and char oxidation to NO could be reduced by 52.32 and 75.72 kJ/mol, respectively, compared with those without OH participation. By coupling with the kinetic results of transition state theory (TST), it was concluded that the participation of OH was more conducive to the oxidation of ammonia to NO, and its formation rate is higher than that of HNO or N2O in the study temperature range. Furthermore, this work revealed the molecular path of HO2 formation in the NH/char/O2 co-combustion system with the participation of OH, and obtained the necessary factors and temperature conditions for its formation (higher than 1673 K). The above results are conducive to understanding the characteristics of NOx generation during ammonia-coal co-combustion, which can provide theoretical guidance and reference for the development of N conversion mechanism of ammonia-coal co-firing.