The complicated geological conditions, including the Fault Sun, in East No. 2 mining sub-area of the Longdong coal mine will influence the stability of strata during mining, leading to serious geological hazards. To circumvent this issue, a similarity simulation experiment was designed and performed in this study, in which the failure characteristics and evolution of displacement and stress within the strata were investigated, and the optimum width of a waterproof coal pillar was determined. The results showed that, as the working face progressed, the coal seam roof gradually deformed, from initial caving of the immediate roof to complete movement and curved subsidence of the entire roof. Significant changes in displacement and stress within the coal seam roof were recorded, and these increased during continuous mining activity. Displacement and stress difference on either side of the fault gradually increased and reached remarkable values with increase in mining distance. On the basis of the experiment results, water inrush is believed to be caused by the interaction between mining and the fault, and, as calculated from parameters collected in field investigations, a waterproof coal pillar of 50 m width should be established to prevent Fault Sun activation, thereby reducing the risk of water inrush from neighbouring aquifers.