Experimental studies on the decomposition and desulfurization of CaC03 have been performed at a TGA-FTIR analyzer and a combustion test furnace under 02/C02 conditions and conventional combustion environment. The effects of C02 concentration on limestone decomposition, desulfurization product properties, limestone desulfurization efficiency were investigated. The desulfurization reaction mechanism was analyzed. Decomposition temperature of CaC03 under 02/C02 environment is higher than that under air environment. The presented C02 constrains the decomposition of CaC03. At a given temperature, CaC03 decomposition ratio decreased as C02 increase. Moreover, the initial decomposition temperature increased. The reactive surface area of CaC03 decomposition samples in high C02 environment was larger than that in conventional conditions. Two-stage reaction mechanism of limestone desulfurization during pulverized coal combustion in 02/C02 atmosphere was obtained. At low temperature, the reaction is: CaC03+S02→CaS04. CaC03 having lower reactivity than CaO reacts with S02 directly results in lower desulfurization efficiency compared with air atmosphere. At high temperature, the reaction is: CaC03→ CaO+C02, CaO+S02→CaS04. Higher reactivity CaO under 02/C02 than air environment reacts with S02 and formed CaS04 reduction reaction at high temperature is restrained under 02/C02 resulted in higher desulfurization efficiency.