An integrated approach is adopted to study the lignite deposits of Surkha mine associated with the Khadsaliya Clays Formation (Eocene) of Saurashtra Basin, western India. The compilation of detailed investigation includes organic petrographical, palynofacies and geochemical analyses. The type and amount of organic matter and its relation to palaeoenvironmental conditions have been determined and discussed along with its significance as hydrocarbon source. The macerals of huminite group show dominance (ay. 61%) over the liptinite and inertinite groups. The petrographical indices (GI-TPI, GWI-VI) indicate wood dominated precursors of peat were deposited in limno-telmatic to telmatic regime under mesotrophic hydrological conditions. In palynofacies analysis, it is observed that the particulate organic matter is dominated by the phytoclasts group (ay. 69%), followed by the amorphous organic matter (AOM) and palynomorphs. The biomarker signatures show angiosperm and gymnosperm source vegetation. The presence of sesquiterpenoids indicate the occurrence of Dipterocarpaceae flora suggesting the existence of rain-forest vegetation in the vicinity of depositional site. The kaurane-type of diterpenoids suggest the presence of conifers among the source flora. The extrapolation of organic matter data on Tyson's APP diagram along with the Pr/n-C-17 vs. Ph/n-C-18 plot indicate that the deposition took place in dysoxicsuboxic conditions with intermittent shifting of the environment in proximal settings. The huminite reflectance values (ay. 0.31% R-r) show a good correlation with gross calorific values (ay. 3917 cal/g) and average T-max value (416 degrees C) of the lignites. Furthermore, the abundance of thermally unstable hop-17(21)-ene and beta beta-hopane indicate immature stage of lignites. These lignites contain high TOC (ay. 35 wt. %) and low ash yields. The volatile matter, carbon and oxygen contents are relatively high, whereas sulphur content is moderate, and hydrogen and nitrogen contents are comparatively low in all the lignite samples. The hydrogen index values vary between 53 and 538 mg HC/g TOC, the atomic values of H/C range from 0.47 to 1.04, and of O/C from 0.20 to 0.29. Overall, the lignite-bearing sequence is characterized by type II-III admixed kerogens (organic matters), and has potential to generate hydrocarbons upon maturation.