A large amount of lignite-derived water is created during the process of refining lignite. The concentration of Fe, Mn, phenol, and some other organic pollutants of the lignite-derived water is above the discharge permit or circulating cooling water reuse standard in China. A laboratory-scale upflow biological aerated filter (UBAF) was developed to treat this lignite-derived water. Three kinds of coke powders, as waste products in the coal chemical industry with 0.1–0.4 mm, 0.5–1.0 mm, and 1.0–2.0 mm in diameter, were tested as the UBAF's carrier materials. A comparative study of gas–water ratio for the UBAF is presented. The studies presented in this paper demonstrate that with coke powder diameter of 0.5–1.0 mm and gas/water ratio of 7:1, the UBAF reactor can achieve optimal removal efficiency. After the UBAF treatment, the removal efficiency of Fe, Mn, and phenol was found to be 38.4–62.5%, 56.6–74.3%, and 89.5–94.3%, respectively. The lignite-derived water can meet the discharge permit to surface water and reuse standard for circulating cooling water after the treatment by UBAF. The coke powder, as a waste material, can be used as a support material for UBAF very well.