Sequence stratigraphy and coal petrology can be used to comprehensively analyze the mechanism of extremely thick coal seams under the influence of the paleo-climate, paleo-environment, and accommodation space during a coal-forming period. Based on the vertical variations in coal quality, macerals, and lithology, key sequence surfaces were identified, including the terrestrialization surface (TeS), paludification surface (PaS), give-up transgressive surface (GUTS), accommodation reversal surface (ARS), exposure surface (ExS), and flooding surface (FS) in thick coal seams of the Middle Jurassic Dameigou Formation in the Saishiteng Coalfield, northern Qaidam Basin. Using these key sequence surfaces, thick terrestrial coal seams can be divided into several wetting-up and drying-up cycles. In general, the vitrinite content, vitrinite/inertinite ratio (V/I), and gelification index (GI) increased from bottom to top, whereas the inertinite content decreased in the wetting-up cycles. The vertical stacking pattern considers the PaS as the bottom boundary, and the GUTS or ARS as the top boundary, representing an increasing trend in the accommodation space. However, the vitrinite content, V/I, and GI values decreased from the bottom to the top, whereas the inertinite content increased during the drying-up cycle. Another vertical stacking pattern started from the TeS, with the ExS or ARS as the top boundary, representing a decreasing trend in the accommodation space. The thick coal seams at the edge of the Saishiteng Coalfield are blocked by a large number of clastic sediments, whereas relatively few clastic sediments are found in the coalfield center; thus, a single extremely thick coal seam with good continuity can be formed. Based on the coal petrology and sequence stratigraphic analyses, a model of extremely thick coal seams superimposed on multiple peatlands was established from the basin margin to the basin center. Four to five drying-up and wetting-up cycles were predicted in accumulation variation. During a water transgression stage, new peat accumulates on the land, corresponding to a wetting-up cycle. In a water regression stage, new peat accumulates in the basin center, corresponding to a drying-up cycle. Analysis of the genesis of thick coal seams is important for the in-depth excavation of geological information during the coal-forming period and for coal resource exploration in terrestrial basins.