We perform two- and three-dimensional particle-in-cell simulations of reconnection in magnetically dominated e ^ { \pm } plasmas subject to strong Compton cooling . Magnetic reconnection under such conditions can operate in accretion disk coronae around black holes , which produce hard X-rays through Comptonization . Our simulations show that most of the plasma in the reconnection layer is kept cold by Compton losses and locked in magnetically dominated plasmoids with a small thermal pressure . Compton drag clears cavities inside plasmoids and also affects their bulk motions . These effects , however , weakly change the reconnection rate and the plasmoid size distribution from those in non-radiative reconnection . This demonstrates that the reconnection dynamics is governed by similar magnetic stresses in both cases and weakly affected by thermal pressure . We examine the energy distribution of particles energized by radiative reconnection and observe two distinct components . ( 1 ) A mildly relativistic peak , which results from bulk motions of cooled plasmoids . This component receives most of the dissipated reconnection power and dominates the output X-ray emission . The peak has a quasi-Maxwellian shape with an effective temperature of \sim 100 keV . Thus , it mimics thermal Comptonization used previously to fit hard-state spectra of accreting black holes . ( 2 ) A high-energy tail , which receives \sim 20 % of the dissipated reconnection power . It is populated by particles accelerated impulsively at X-points or “ picked up ” by fast outflows from X-points . The high-energy particles immediately cool , and their inverse Compton emission explains the MeV spectral tail detected in the hard state of Cyg X-1 . Our first-principle simulations support magnetic reconnection as a mechanism powering hard X-ray emission from magnetically dominated regions of accreting black holes .