Molecular fossils (biomarkers) are abundant in organic rich natural archives such as peats and lignites (fossilized peat), where their distribution is governed by their biological source, environmental factors, such as temperature and pH, and diagenetic reactions. As a result, biomarkers in peat have become an important tool to study past variations in vegetation, environment and climate in terrestrial settings, as well as biogeochemistry on time-scales of hundreds to millions of years ago. In recent years, significant progress has been made in understanding the controls on biomarker distributions, especially those derived from microorganisms and peat-forming plants, allowing for example, the quantification of past temperature and vegetation history during peat formation. Herein, we provide a review of a range of commonly applied biomarker proxies in peats, discuss the latest proxy developments, and explore the potential of using biomarkers in peat and lignite as paleoenvironmental proxies. We provide a framework for biomarker analyses in peat and identify possible future research directions.