The present paper entails a study carried out on selected samples of coal and carbonaceous shales of Permian age from the Sattupalli open cast coal mine of Godavari valley, Andhra Pradesh to know their petrographic and chemical characteristics. Based on these characteristics, the depositional environment has also been discussed. The study reveals that these coals are sub-bituminous in rank and are chemically characterized by low to medium moisture (4.3 to 8.6 wt %) and volatile matter (24.5 to 32.6 wt %) while the ash yield varies between 16.4 and 35.3 wt %. Petrographically these coals are rich in inertinite. Liptinites occur in very small concentration. Collotelinite, collodetrinite and vitrodetrinite are the main vitrinite macerals whereas fusinite, inertodetrinite and semi-fusinite constitute the major proportion of inertinites. Mean partial derivative C-13 value measured for coal is -22.58 +/- 0.20 parts per thousand and for carbonaceous shale it is -23.64 +/- 0.57%. while in the organic matter of Barakar sandstones the partial derivative C-13 is -25.2 +/- 2.1 parts per thousand. Dry periods are reflected by the abundance of inertinite in some samples while more anoxic conditions are indicated by high concentration of vitrinite in some samples. Seam-II of Sattupalli coalfield initially formed in dry condition and gradually flooding took place due to rise in the water table. During the formation of the upper part of the seam, again a relatively dry phase prevailed. Moreover, a positive correlation of partial derivative C-13(org) with TOC and a negative one with TIC indicate that partial derivative C-13(org) is being modified by partial derivative C-13(DIC). (C) 2011 Elsevier B.V. All rights reserved.