Sedimentary charcoal records provide useful perspectives on the long-term controls and behavior of fire in the Earth System. However, a comprehensive understanding of the nuances, biases, and limitations of charcoal as a fire proxy is necessary for reliable paleofire interpretations. Here, we use a charcoal dispersal model to answer the following questions: (1) How does the dispersal of wood and grass charcoal particles differ? (2) Do traditional conceptual models of charcoal dispersal reliably characterize grass charcoal dispersal? We find that small differences in shape (length:width (L:W)) and density of grass and wood charcoal can cause substantial differences in particle dispersal and source area. Whereas the modeled dispersal of wood charcoal shows a localized deposition signal which decays with distance, grass charcoal shows more diffuse deposition lacking a localized center (for both >125 µm and >60 µm). Although paleofire research has typically not distinguished between fuel types when interpreting source area, we show that the dispersal of charcoal derived from different fuels is unlikely to be uniform. Because differences in localization, production, and preservation could bias aggregate charcoal accumulation, caution should be taken when interpreting wood and grass-derived charcoal particles preserved in the same record. Additionally, we propose an alternative, dual background conceptual model of grass charcoal dispersal, as the traditional, two-component (peak and background) conceptual model does not accurately characterize the modeled dispersal of grass charcoal. Lastly, this mismatch of conceptualizations of dispersal mechanics implies that grass charcoal may not fit the criteria necessary for peak analysis techniques.