The objective of the study was to determine the origin and to reconstruct the geological evolution of lignites from the Drmno field (Kostolac Basin, Serbia). For this purpose, petrological and organic geochemical analyses were used. Coal from the Drmno field is typical humic coal. Peat-forming vegetation dominated by decay of resistant gymnosperm (coniferous) plants, followed by prokaryotic organisms and angiosperms. The coal forming plants belonged to the gymnosperm families Taxodiaceae, Podocarpaceae, Cupressaceae, Araucariaceae, Phyllocladaceae and Pinaceae. Peatification was realised in a neutral to slightly acidic, fresh water environment. Considering that the organic matter of the Drmno lignites was deposited at the same time, in a relatively constant climate, it could be supposed that climate probably had only a small impact on peatification. Therefore, variations in compositions of macerals and biomarkers indicate changes in the water level, due to seasonal drying of the mire, which caused vegetation differences in the palaeoplant communities and changes in the redox conditions (from anoxic to slightly oxic) during peatification. Diagenetic transformations of the organic matter were mainly governed by microbial activity, rather than thermal alteration.