The thermal transformation mechanism of pyrite in coal, which governs sulfur emissions and ash deposition, remains highly controversial. There are significant discrepancies in reported activation energies (E_a) (60–310 kJ/mol) and conflicting reaction pathways. To resolve these long-standing controversies, this study proposes a competition-coupling mechanism: pyrolysis and oxidation compete under local O₂ and temperature gradients, while coupling through microstructural evolution. Specifically, pyrolysis generates a porous Fe_1−XS that facilitates oxidation, which in turn can form a passivating oxide/sulfate layer that promotes further pyrolysis. This mechanism reconciles longstanding kinetic controversies by showing that the apparent activation energy is not a fixed value but instead a dynamic parameter, shifting along a continuous curve that bridges pyrolysis and oxidation-dominated regimes. Furthermore, we construct a unified phase diagram by incorporating the competition-coupling mechanism into classical thermodynamic equilibria. This diagram uses the molar ratio FeS₂/(FeS₂ + O₂) and temperature to categorize the transformation process into four distinct regions—pyrolysis-dominated, competition-coupling, oxidation-dominated, and melt-dominated. The key contribution of this work lies in the diagram which offers a practical framework for optimizing combustion and roasting systems, allowing for improved control over sulfur emissions and ash-related issues such as slagging and fouling.