Computational particle fluid dynamics (CPFD) simulation was performed to study coal pyrolysis in a circulating fluidized bed downer containing binary particles (coal particles and heat carrier particles). A suitable drag model, which considers the cluster effect by assuming dynamic equilibrium for particles in and out of the cluster, was incorporated into the CPFD model, which shows acceptable accuracy in describing the hydrodynamics of binary particles in the downer. The predicted mixing index of temperature was also in good agreement with the experiment, indicating that the model can also be used to study heat transfer between binary particles in the downer. The coal pyrolysis kinetics were further incorporated into the model. Simulation results demonstrated that the rapid mixing of coal and heat carrier near the downer inlet was beneficial for the rapid temperature increase of coal particles. The predicted coal pyrolysis behaviors further demonstrated that the gas-solids can flow uniformly with a short residence time and low back-mixing in the downer, which facilitates the rapid pyrolysis of coal. It was concluded that the CPFD modeling can provide reasonable simulation results with respect to hydrodynamics, heat transfer, and chemical reactions in the downer for coal pyrolysis.