Based on discussion and analysis of technological innovation and relevant strategic theories, this article investigated technological innovation and strategy issues of China's coal industry with the conclusion that the major differences in technological advancing stages should be prudently considered. The innovation strategy for advanced enterprises should be both leading innovation and imitative innovation. For other enterprises, imitative innovation would be the main strategy. The optimal situation for China's coal industry is technology integration cooperation between enterprises, universities and research institutes with the diversity of participants and engagements.