The Muli Basin in the Qinghai Province, located at the northeastern margin of the Tibetan Plateau, is a Jurassic coal-bearing basin, and is an important area for coal production in China. Recent explorations have revealed the presence of unconventional types of gases such as coalbed methane and gas hydrates. We have investigated the sedimentology, sequence stratigraphy, and lithofacies paleogeography of this basin based on data from outcrop and borehole sections. The coal-bearing strata include the Lower Jurassic Reshui and the Middle Jurassic Muli and Jiangcang Formations. Lithofacies including conglomerates, sandstones, mudstones, and coal were identified and have been interpreted to be formed in environments ranging from braided fluvial, braided fluvial delta, to lacustrine. The preferred sites of coal accumulation are the interdistributary bays of lower delta plain and upper delta plain environments. Three types of sequence boundaries are recognized, including regional unconformities between the Lower Jurassic and underlying Triassic, the basal surface of incised valley fills of thick-bedded sandstones in the Muli and Jiangcang Formations, and the surfaces that mark abrupt depositional facies shifts. Four third-order sequences were subdivided, namely S1, S2, S3, and S4 in ascending order, which correspond to the Reshui Formation, the Muli Formation, the lower member of the Jiangcang Formation, and the upper member of the Jiangcang Formation, respectively. Each sequence consists of a lowstand systems tract, a transgressive systems tract (TST), and a highstand systems tract. A series of sequence-specific basin-wide paleogeographic maps have been constructed based on contour maps of several lithological parameters including stratal thickness, sandstone-to-mudstone ratio, and mudstone thickness. From S1 to S4, the Muli Basin experienced an evolution from a braided fluvial system to braided fluvial delta, then to a lacustrine system, showing a gradual deepening process. Thick coal seams with thickness greater than 3.5 m (11.5 ft) were primarily developed in the delta plain environment where the rate of peat accumulation can be easily balanced by the rate of accommodation generation. A five-stage coal-accumulation model has been summarized, and the major coal seams mainly developed in the early and late TST of sequences S1 and S2.