Although no precise modern analogue exists for the peat-forming ecosystems (mires) of Tertiary times, it is argued that the principles underlying peat formation are essentially unchanged in the sense that a peat-forming ecosystem has an incomplete decomposition process (normally because of waterlogging) , leaving a residue of organic material in its overall energy-Row budget. The study of modern mires is therefore of relevance to Tertiary coal geologists, The classification of modern mires is best achieved by reference to their hydrological characteristics, particularly the source of water entering the system. Flow-fed (rheotrophic) mires are often relatively rich in nutrients and elastic, while rainfed (ombrotrophic) mires are poor. The transition from one hydrological state to the other can occur during mire development and involves a physical elevation of the mire surface by the growth of peat. Such mires have a two-layered (diplotelmic) structure in which the surface layer (acrotelm) is periodically aerobic, has a loose structure and a high hydraulic conductivity, while the lower layer (catotelm) is compacted, anaerobic and has a low hydraulic conductivity. The hydrological outcome is that precipitation landing upon a raised, ombrotrophic mire drains from the elevated mire surface laterally through the acrotelm. The water retention of the mire and its elevated water table is dependent on the poor water conductivity of the catotelm. The transition to the ombrotrophic condition is accompanied by higher rates of pear accumulation and increasing mire acidity. It begins with isolated colonization of hummock-forming plants that later converge into an extended cupola. This ecological transition may be a consequence of external changes, such as climatic alteration (increased precipitation: evaporation ratio) or autogenic, internal successional developments. Basin subsidence, however, or eustatic sea-level rise in the case of coastal systems, can operate in the reverse direction and prevent the permanent establishment of an ombrotrophic system. The ombrotrophic mire is ultimately limited in the depth of its pear development by microbial respiration within the catotelm. As the catotelm extends with pear accumulation, the total respiratory activity of the profile will equilibrate with primary productivity and peat formation slows down to an eventual standstill. On the assumption that peatland hydrology operated in a similar way in former times, the deep peats (and eventually coals) of Tertiary times can best be explained, therefore, in terms of stacks of sequential mires rather than single, continuously forming ecosystems.