The ply structure of the Bulli seam in the Southern Coalfield of the Sydney Basin persists over the main part of the coalfield. Lateral variations were investigated using both petrographic profiles and swelling index profile sections. The results indicated that the thickness pattern of the whole Bulli seam was affected by three independent factors: (1) post‐depositional loss of the top portion of the seam; (2) pre‐depositional topography; and (3) differential subsidence during deposition. The lack of definite correlation between seam thickness and present geological structure suggests that no local tectonic movement took place during deposition of the seam. Tectonic movement cannot, therefore, be the main cause of variation in seam thickness. Subsidence during deposition of the Bulli seam in the northeastern margin of the coalfield appears to have been too rapid, and near the western margin too slow, to form a thick coal seam. However, in the main part of the coalfield, the rate of subsidence was suitable for peat accumulation and a thick seam was deposited under stable conditions, as indicated by the persistent ply structure.