The 65-year-old denied one count relating to sexual communication and one count relating to attempted sexual activity with a child under 16 between August and December 2021 when he appeared at Wolverhampton Crown Court on Tuesday.
Coughlan spoke only to confirm his name and address.
There was no application for bail.
Judge Michael Chambers QC adjourned the case for the trial which will be held on July 18. Coughlan, of Martin Drive, Short Heath, in Willenhall, was remanded in custody until then.
The veteran politician was the elected representative for the Willenhall South ward but resigned in December following his arrest.
A spokesman for Walsall Council said at the time: “The council received Councillor Sean Coughlan’s written notice of resignation from his office as a councillor. His resignation was formally and immediately accepted. He is no longer a Walsall MBC councillor.”
He was first elected in 1995 and has successfully defended the seat on a number of occasions, the latest being in May this year.
During his career he rose to become deputy leader and then leader of both his party and Walsall Council, which he was in charge of between 2016 and 2018.
He stepped down as leader of the Walsall Labour Group in 2019.
It is understood that Councillor Coughlan was also suspended from the Labour Party following his arrest.