ABSTRACT: In Indian subcontinent Cenozoic lignites are found at several places along the boundary of Indian plate which was the shoreline of palaeotethys. However, the western part of the Indian subcontinent is particularly rich in lignites and shales along with hydrocarbon reserves. Thus, this location of the country is an important producer of hydrocarbon and lies at a significant position in the mineral map of the country. In the north western state of Rajasthan, lignites are reported in associated with the Cenozoic sedimentary rocks extending an area of 70,000 sq.kms in Bikaner, Barmer, Nagaur, Jalore and Jaisalmer districts. The present study focuses on the lignite bearing sequence exposed in the Matasukh and Barsingsar lignite mines of Bikaner-Nagaur Basin, Rajasthan. The lignite belongs to the Palana Formation of early Palaeocene age (~66-56 Ma). The lignite seam extends over an area of 2.50 sq.kms and is estimated to have consisted of 10.10 million tonnes of lignites.The lignites of Matasukh and Barsingar lignite mines are studied based on organic petrographic data to elucidate the palaeodepositional conditions and the hydrocarbon source potential. The lignites of Matasukh are predominantly composed of huminite macerals (av. 60 vol. %), followed by moderate liptinite content (av. 23 vol. %). Inertinite macerals (av. 9 vol. %) and mineral matter (av. 8 vol. %) are in lesser proportions. However, in Barsingsar, the lignites are predominantly composed of huminite macerals (av. 74 vol. %), followed by Inertinite macerals (av. 10 vol. %), liptinite content (av. 9 vol.%) and mineral matter (av. 6 vol. %). The dominance of detrohuminite (attrinite + densinite) concerning telohuminite (textinite + ulminite) suggests that the organic matter has undergone a higher degree of degradation; as is also indicated by the frequent occurrence of funginite. In Matasukh, Low TPI and GI values indicate limno-telmatic and mesotrophic-rherotrophic conditions of the palaeomire during the deposition of the lignite forming peat. The deposition took place in varying depositional settings. However, in Barsingsar, the lignites are formed in limnic and rheotrophic conditions. The deposition took place possibly in a marshy depositional setting. Matasukh lignite has huminite reflectance values (av. VRo= 0.26%) indicating that the studied lignites attained ‘brown coal’ as German Standard or 'lignitic’ stage/rank (ASTM) and is of low rank B (ISO: 7404-5, 2009). Altogether, the lignites of Bikaner-Nagaur Basin show varying petrographic characteristics indicating the variation in the source floral composition, microbial degradation and depositional conditions in different parts of the basin.