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In the present investigation, lignite samples from working seams of Matasukh mines, Nagaur, Rajasthan have been subjected to optical microscopy and mineralogy to determine their mineralogical characteristics and paleodepositional condition. Petrographic analysis of composite samples indicates that these lignites are dominated by carbonate minerals followed by sulfides and clay minerals. Framboidal pyrites have also been recorded in the Nagaur lignite samples, which reveals marine incursion into the study area. The occurrence of clay mineral in cell cavities, fissure, and cracks indicates authigenic and syn-depositional origin of the Nagaur lignite. The study reveals Nagaur lignites deposited under terrestrial oxic to marine terrestrial oxic to sub-oxic condition and semi-arid to slightly arid paleoclimatic conditions.