Initial sequence-stratigraphic analysis indicates that widespread lignite deposits in the Paleogene strata of the Gulf Coast of the United States are found only in highstand systems tracts. However, not all highstand systems tracts contain widespread lignite. Bluffs rising above the Nueces River in Zavala County, Texas, contain parts of two depositional sequences. The lower sequence contains lignite and includes sediment of both the Midway and Wilcox Groups (Paleogene). All of the lignite in the lower sequence is in the highstand systems tract. The upper sequence lacks lignite and consists entirely of sandstone and shale of the Carrizo Formation (Wilcox Group). High rates of siliciclastic sedimentation probably precluded formation of peat during deposition of the highstand systems tract of the upper sequence. Direction and rate of relative change in sea level and other extrabasinal factors seem to have exerted a more fundamental control on the abundance and distribution of lignite in the Paleogene strata of the Gulf Coast region than did factors related to depositional setting of the peat precursor.