We have used magnetohydrodynamic simulation methods to investigate the characteristics and relevance of the magnetic island coalescence instability for magnetotail reconnection. The study was carried out under a wide range of parameters with different initial conditions. Periodic and nonperiodic island chains in or near equilibrium were considered and their linear and nonlinear evolution compared and contrasted. We found that for the periodic two-island configuration the reconnection rate showed little dependence on resistivity and increased with lower plasma &bgr;. For the nonperiodic case, which resembled a two-dimensional magnetotail configuration, a chain of magnetic flux ropes whose size decreased down the magnetotail was initialized. The coalescence process led to the formation of a large magnetic island whose motion down the tail drove reconnection at an x type neutral line. In the nonperiodic case variation of parameters had different effects than in the periodic case: a lower plasma &bgr; lowered the growth rate while the rate of energy conversion was higher for lower resistivity. Our results indicate that coalescence is an efficient mode of reconnection in long island chains, and in a finite system it can help drive reconnection on a scale larger than the original islands. ¿ American Geophysical Union 1989