In municipality of Ugljevik (Bosnia and Herzegovina), the coal-fired thermal power plant is located in the vicinity of the populated area. The ambient air quality monitoring within this area were not systematically performed in the previous period. This research was the first to include indicative measurement of pollutant concentration in air combined with modeling techniques for the purpose of a preliminary assessment of impact which the power plant has on air quality. Since coal, with the sulfur content of 3-6%, is used, as well as the fact that there was no flue gas desulphurization during the research period, this paper shows the results for SO 2 as one of the most prominent indicators of pollution originating from the power plant. As a complement to the measurements, modeling of SO 2 dispersion was carried out using ADMS5 software. The measurements indicated increased ground-level concentrations of SO 2. Additionally, the modeling of SO 2 dispersion with real meteorological data was carried out. The modeling confirmed high SO 2 concentrations in research area. Also, it was found that the high episodic ground-level SO 2 concentrations are the consequence of the terrain configuration and meteorological conditions.