Fracture propagation mechanisms in coalbed methane (CBM) reservoirs are very complex due to the development of the internal cleat system. In this paper, the characteristics of initiation and propagation of hydraulic fractures in coal specimens at different angles between the face cleat and the maximum horizontal principal stress were investigated with hydraulic fracturing tests. The results indicate that the interactions between the hydraulic fractures and the cleat system have a major effect on fracture networks. “Step-like” fractures were formed in most experiments due to the existence of discontinuous butt cleats. The hydraulic fractures were more likely to divert or propagate along the butt cleat with an increase in the angles and a decrease in the horizontal principal stress difference. An increase in the injection rate and a decrease in the fracturing fluid viscosity were more conducive to fracture networks. In addition, the influence on fracture propagation of the residual coal fines in the wellbore was also studied. The existence of coal fines was an obstacle in fracturing, and no effective connection can be formed between fractures. The experimental investigation revealed the fracture propagation mechanisms and can provide guidance for hydraulic fracturing design of CBM reservoirs.