We report on the observation of quantum coherence of Bose–Einstein condensed photons in an optically pumped, dye-filled microcavity. We find that coherence is long-range in space and time above condensation threshold, but short-range below threshold, compatible with thermal-equilibrium theory. Far above threshold, the condensate is no longer at thermal equilibrium and is fragmented over non-degenerate, spatially overlapping modes. A microscopic theory including cavity loss, molecular structure and relaxation shows that this multimode condensation is similar to multimode lasing induced by imperfect gain clamping.