The transport behavior of fluids in low permeability coalbed methane reservoirs is analyzed with considerations of the desorption and diffusion effects of the coalbed methane and the threshold pressure gradient. A mathematical model for gas-water two-phase nonlinear flow is established for low permeability coal reservoirs. The governing equations for the gas-water two-phase nonlinear flow are derived. The case study shows that, when the liquid phase threshold pressure gradient is increased from 0.001MPa/m to 0.007Mpa/m, the maximum gas production of coal reservoirs is reduced by nearly 15%; compared with the liquid phase threshold pressure gradient of 0.001MPa/m, the maximum gas production without the threshold pressure gradient is increased by nearly 7% and the cumulative gas production also has a certain extent of increase. Therefore the existence of the threshold pressure gradient makes the fluid in fractures more difficult to flow and leads to a low production rate. The case study shows that the mathematical model of the gas-water two-phase nonlinear flow could provide a theoretical basis for defining a reasonable gas-well deliverability of low permeability coal reservoirs.