The 100-m thick Middle Miocene Yallourn brown coal seam was the last of the major Latrobe Valley Group seams to form in the Gippsland Basin (southeastern Australia) and the final major coal to form in Australia. Coal deposition coincided with the Middle Miocene climatic optimum. During this warm period of relatively high sea-levels, high water tables and relatively high subsidence rates, a 565 km(2) area of alternating eutrophic and ombrogenous peat swamp developed at the western end of the Latrobe Valley to form the Yallourn Seam. Stratigraphic units of the seam contain a high sclerophyll plant component and abundant charcoal, suggesting seasonal dry periods alternated with wet warm conditions characterised by abundant rushes and dense kauri forests. Iron content in parts of the Yallourn Seam is relatively high, and a strong correlation exists between the iron distribution and the abundance of proteoid roots (mainly Proteaceae) - an indicator of seasonal dry periods. The contemporaneous carbonates of the Wuk Wuk Mart were deposited in a high-productivity, upwelling, warmer water (subtropical) environment. A new carbon isotope profile at 1 in intervals through the Yallourn Seam shows a poor relationship between delta C-13 isotopes and coal colour, but some correlation with Gymnosperm abundance. The delta C-13 record also correlates well with long-term secular changes in climate, the presence of global carbon maxima CM2-CM4, and with the deep-sea delta C-13 marine organic record. Thick coal steam, development ended near the end of the Middle Miocene climatic optimum. The termination of coal seam deposition in Latrobe Valley was primarily the result of tectonic compression, uplift and development of adjacent highland relief, and erosion at the end of the Miocene. (c) 2006 Elsevier B.V. All rights reserved.