The X-ray diffraction analysis of 75 thin volcanic clay bands in the Lower Cretaceous of the Peace River coalfield shows kaolinite and mixed-layer illite–smectite to be the two clay minerals present. Kaolinite is dominant in the clay bands (tonsteins) in the coal-bearing Gething and Gates formations, whereas illite–smectite is dominant in the clay bands (K-bentonites) in the marine Moosebar Formation. A complete gradation exists between the two clay minerals, demonstrating their common volcanic origin. Volcanic textures are seen in thin section. The relationship between clay composition and depositional environment corresponds with the clay stability fields with smectite the precursor of the mixed-layer clay. The proportion of illite in the latter averages 22% and corresponds with the coal rank. The major-element analyses mainly reflect the clay composition but with contributions from resistate and diagenetic minerals. Amongst the trace elements there are those that are both immobile in the alteration process and diagnostic of a specific volcanic composition. Based on such trace elements the ash composition is thought to have ranged from rhyolite to dacite, perhaps due in part to original grain-size variation as in tephra beds.