Botryococcus, an important member of the planktonic algae, occurs in freshwater pools, lakes and occasionally in brackish-water lagoons, with wide distribution in tropical and temperate climate zones throughout the world. It is recognised as an oil-producing alga that is found in rock records from the Precambrian onwards. Here, this alga was retrieved from two different lignite mines of Rajasthan and Gujarat (western India), of early Eocene age. Apart from discussing its structural details, alterations in structures and preservation biases, this alga was used to reconstruct the depositional environment of the region based on its morphological and taphonomical characteristics. The images under transmitted light, fluorescence and scanning electron microscopy display aggregates of the irregular colonies, spherical to oval in shape, with cups arranged in definite patterns. The taphonomic characteristics of a large number of these algae indicate their autochthonous origin and in situ burial conditions. The dissolution of their outer layers suggests early diagenetic processes and loss of integrity due to microbial activity in the later phases of their burial in these sediments. The environment in the early Eocene has been reconstructed on the basis of the present findings, along with earlier recorded palynofacies from the region.