Several Mio-Pliocene aged lignite seams occur as part of a non-marine transgressive sequence in the Elhovo graben in southeastern Bulgaria. The present study is focused on 45 samples collected from three boreholes in the eastern part of the basin. Petrographic data along with ash and sulphur contents were used in order to determine the lateral and vertical variations of the coal facies and depositional environment of the Elhovo lignite. The lignite seams accumulated in a rheotrophic, low-lying mire with high pH value and are characterized by high ash yields and sulphur contents. Despite of the neutral to weakly alkaline environment the bacterial activity was limited and the tissue preservation and gelification were mainly controlled by the redox conditions. Vegetation rich in decay resistant conifers dominated in the Elhovo basin together with mesophytic angiosperm species. The absence of algal remains and sapropelic coal indicated that open water areas were not present during peat accumulation. The latter processed in an environment, characterized by low subsidence rate, in which prior to the burial the woods were subjected to severe mechanical destruction. According to our interpretation, the enhanced impregnation of the tissues bacteria and fungi played only a secondary role in the process of humification. The lignite from borehole 122 and partly from BH 145 deposited in an environment characterized by relatively low (ground)water table, whereas to the south an area dominated by a flooded forest swamp (BH 104) formed. This is suggested by the better tissue preservation and gelification of the organic matter in BH 104. The vertical variation of the maceral composition in the studied lignite is interpreted as a consequence of vegetational changes, rather than to changes in the depositional environment. The low contents of inertinite macerals indicate that despite of the low water level the environment was relatively wet and the thermal and oxidative destruction of the tissues was limited. Peat accumulation was terminated by a major flooding event and a short term establishment of a lake. In contrast to the West Maritsa basin, no seam formed in the Elhovo basin during the filling stage of the lake. (C) 2006 Elsevier B.V. All rights reserved.