Abstract: The development of low accommodation delta sequences and their coal-formation and mechanisms have increasingly attracted attention. Previous studies focused on the characteristics and mechanisms of coal-formation from the perspective of accommodation changes, while there has been less research on the relationship between the development and evolution of shallow water deltas and coal formation. The Lower Permian Shanxi Formation in the Luxi (western Shandong Province) region was studied in terms of the development and evolution of shallow water deltas and their impact on coal formation. Based on detailed outcrop and core logging of lithofacies and vertical sequences, distributary channels, tide-influenced distributary channels, interdistributary bays, peat swamps, and other delta plain environments, as well as delta front environments such as mouth bars and tide-influenced mouth bars, and prodelta environments, were identified. By comparing single-well and multi-well sedimentary cycles, the shallow water delta sequences could be divided into five depositional cycles: C1-C5, each showing a sub-cycle of progradation-retrogradation-progradation under the background of overall progradation. By integrating the analyses on the delta deposition and coal-formation, we believed that the water dynamic zoning and delta evolution controlled the coal-formation. Results indicate that under the background of low-accommodation space and gentle terrain, the auto-cycle and allo-cycle of the delta jointly controlled the development and coal-formation in the delta. The migration of delta distributary channels caused differences in water dynamic conditions, which controlled the coal-forming environment and coal-seam development characteristics. In the river-dominated area, coal-formation was mainly developed in inter-channel swamps and interdistributary bays, where coal seams were relatively dispersed and limited. In the tide-dominated area, coal-formation was mainly in tide-influenced peat swamps with wide distribution and large thickness. The transgression-regression cycle controlled the overall distribution trend of coal seams and a large amount of peat swamps were formed during the regression period when plants thrived and consequently were rapidly buried and coal-bed formed during the transgression period. The above mechanism of coal formation in shallow water deltas provided a reference for the exploration of coalbed gas in the Upper Paleozoic in the North China region.