The Fuxin Basin is one of the major coal‐bearing basins in northeastern China with the coal seams mainly preserved in the Lower Cretaceous Fuxin Formation. The sequence stratigraphy, palaeogeography, basin evolution, and coal accumulation of the lacustrine coal‐bearing sequences in the Fuxin Formation were analysed based on borehole cores, well logs, and outcrop sections. Fifteen distinct lithofacies types were recognized with lithologies ranging from conglomerates, sandstones, siltstones, and mudstones to coals. Lithofacies are arranged into five facies associations representing alluvial fan, braided fluvial, meandering fluvial, fan delta, and lacustrine depositional systems. These facies associations collectively revealed a continental faulted basin setting. Based on the regional unconformities, basal scour surfaces of the incised valley fills sandstones, paleosols, or seat earths of coal seam on interfluves, and surfaces that mark abrupt depositional facies shifts, the Fuxin Formation was subdivided in two third‐order sequences. Palaeogeographic maps of each sequence have been reconstructed based on the contours of lithological parameters. The palaeogeographic units include alluvial fan, alluvial plain, channel (braided and meandering fluvial), fan delta, and lake. Preferred coal‐forming environments were mainly developed in the fan delta plain and fluvial back‐swamp. Compared with Sequence 1, the activity of basin‐margin faults and basement subsidence of the Sequence 2 gradually decreased, resulting in the lower rate of potential accommodation and less favourable conditions for peat accumulation. This background provided a basic understanding for the lacustrine basin evolution and coal accumulation. A six‐phase evolution model was proposed, which includes lowstand systems tract, early transgressive systems tract, late transgressive systems tract, early highstand systems tract, late highstand systems tract, and falling stage systems tract. The early and late TST of Sequence 1 and Sequence 2 were relatively beneficial stages for peat accumulation and coal development in the Fuxin Basin.