Oxy-fuel combustion, in which a conventional hydrocarbon fuel is burned in presence of oxygen diluted with carbon dioxide (called henceforth as oxy-fuel), is an emerging technology that accommodates CO2 sequestration while offering the prospect of low emissions. Dilution by CO2 (from flue gas recirculation) prevents high peak temperatures thereby reducing material damage, high NO, formation etc. Studies [1] reveal that CO2-diluted flames are unstable as compared to N-2-diluted flames and that a higher molar fraction of oxygen, 30% by volume, is necessary to ensure stable combustion. Nevertheless, as the heat transfer properties of CO2/O-2-70:30 mixtures are different to that of normal air, the flow profiles and heat flux distributions might vary within the furnace. While considering the retrofit of existing normal air operated coal fired furnaces with oxy-fuel mode, it is imperative to investigate these flow variations in detail. In the present study, Computational Fluid Dynamics (CFD) based simulations have been done for a typical 210 MW Indian pulverized coal fired furnace under normal air combustion and under oxy-fuel combustion (CO2/O2-70:30 volume %) mode and the results in terms of CO2 concentration, temperature distribution, velocity of flue gas, particle trajectories and devolatilisation characteristics have been compared.