Fracturing treatment is essential for the development of coalbed methane(CBM) fields. In the fracturing of coal seams, high filtration loss, serious formation damage, low flow-back and poor efficiency were the main problems when using conventional water-based fracturing fluids. A nitrogen foam fracturing fluid system with low formation damage was developed based on the geological features of CBM reservoirs. The formula of the foam fluid mainly includes a bactericidal agent, foaming surfactants and clay stabilizers. Filtration loss, dispersion, and microscopic foaming experiments were conducted for testing the capacities of the fluid system as a foaming and fracturing fluid. Experimental results show that the fracturing fluid has a good foaming ability and foam stability, excellent shearing bearing ability, strong sand carrying capacity. The plugging effect of foam can significantly reduce the filtration loss, and nitrogen can improve the flow back ability of the fracturing fluid. The surfactants in the fracturing fluid can also reduce the interfacial tension between coal and water, thus improving the dispersion of coal powders in the fluid. In comparison with conventional fracturing fluids, the nitrogen foam fracturing fluid can cause much less formation damage to the CBM reservoir.