Extensive thick lignite apparently lies within 250 feet of the land surface in Dyer, Lake, Lauderdale, Obion, and Tipton Counties, Tennessee. Information on geology, land use, soils, ground water, and instability is compiled along with a bibliography. A test and monitoring site was investigated at Fort Pillow Prison in Lauderdale County. Analyses were made of lignite, overburden, associated water, and leachate. A year or more of data are presented on rainfall, water levels, and chemistry of surface water, ground water, leachate, and water from test pits. The main potential environmental problems are quality of surface water and possibly shallow ground water. The main aquifer of the region will likely be unaffected by mining. Low transmissibility of shallow aquifers will minimize lowering water levels of wells. Soil reclamation and conservation should be readily accomplished.