The carbon and nitrogen stable isotopic compositions and elemental characteristics of Pliocene pale and dark lignites in the Jinsuo Basin, Yunnan Province, southwestern China, were investigated. These data were used to develop paleoenvironmental models and to discuss possible geological driving forces for the formation of pale and dark layers. The δ ¹³C values of fossil wood (av. −24.79‰) and fusain samples (av. −24.19‰) are generally higher than the values obtained from bulk pale (av. −27.01‰) and dark (av. −26.38‰) lignite samples. In contrast, the δ ¹⁵N values of fossil wood (av. −0.63‰) and fusain samples (av. 1.29‰) are lower than the average values of bulk pale lignites (av. 2.17‰) and dark lignites (av. 1.79‰). The difference in the carbon isotopic values between pale and dark lignites can be explained by the very high amount of liptinite and strong degradation of woody material by bacterial activity in pale lignites, which resulted in depletion of ¹³C in pale lignites, and the wet/humid depositional conditions contributed to the relatively heavy stable carbon isotope compositions of dark layers. The higher δ ¹³C values in the fossil wood and fusain samples can be explained by the general enrichment of ¹³C in woody material compared to leaves. The weakly negative correlation between the δ ¹⁵N and δ ¹³C values indicates that, besides bacterial degradation, the liptinite content could also influence the carbon and nitrogen compositions of lignites. The influence of the original plant community (gymnosperms/angiosperms) on the carbon and nitrogen isotopic compositions of bulk lignites is insignificant in the Jinsuo Basin. The paleoenvironmental model suggests deposition of pale layers under relatively dry, cold conditions supporting the expansion of gymnosperms such as Pinus yunnanensis. The slight stepwise uplift of the Tibetan Plateau and the approximate co-occurrence of the more intense Asian monsoon might have supported short periods of a locally dry, cold climate resulting in the lowering of water table which was favorable for the formation of pale layers. The low δ ¹³C values in pale layers further support this. The relatively high SiO ₂/Al ₂O ₃ ratios, higher values of the average detrital/authigenic index, and high levels of TiO ₂ and Zr in pale layers suggest an increased detrital input relative to dark layers. The dark layers, however, formed in a tropical/subtropical warm, humid climate that favored angiosperm dominance of the vegetation. The long-term geologically stable conditions together with the regionally warm, humid climate resulted in a rise in the water table in the basin, which led to the formation of dark layers until the subsequent slight uplift of the Tibetan Plateau. This conclusion is also supported by the high δ ¹³C values in dark layers and the thickness differences between pale (thin) and dark (thick) layers and the changes in major elements and minerals changes between the two types of layer.