Hidden, water-abundant areas in coal mines pose a serious threat to mine safety and production. Underground transient electromagnetic method (TEM) is one of the most effective means of detecting water-abundant areas in front of the roadway head. Traditional TEM theories and applications are interpreted mainly on the vertical component. In this study, multicomponent responses of TEM in underground roadways were modeled using the finite-difference time-domain method. Physical simulation was also used for advanced detection of TEM in the roadway. Both the numerical and physical simulation results show that the horizontal component is more sensitive to the location of water-abundant areas. The results of the joint interpretation with both horizontal and vertical components were verified in a practical coal mine application, indicating that it is feasible to use the horizontal component in interpreting TEM data. Thus, the horizontal component could serve as a new approach for coal mine TEM data processing and interpretation.