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Coal and coal combustion byproducts are potential candidates for alternative resources of REEs (rare earth elements). The Illinois Basin is a major coal-producing district in the USA, but little work is available on speciation of REEs in the basin’s coals. In this study, a total number of 382 samples from known locations in the Illinois Basin coal beds were acquired, analyzed for their REE contents, and investigated for any spatial trends or chemical correlations. This study includes Springfield, Herrin, and Baker coal beds—the most heavily mined coals in the basin. An average coal ash from the basin contains 320 ppm REE, with Baker being the highest (407 ppm on average). However, the distribution of REEs in the coal beds was laterally and vertically heterogeneous. A number of trends were found in the REE variations. The most important trend was the relationships of the REE concentrations and fractionations with the distance from the syndepositional sandstones. The total REE concentrations were higher in the proximity of the sandstones, likely due to the increased deposition of detrital material. This increase was the most significant in Springfield coal (90%) and least in Baker (6%). Those coal samples from the Springfield and Herrin coal beds distal from the syndepositional sandstones had a heavy to light REE ratio (H/L ratio) of 0.40 on average, whereas in proximal locations, the ratio was dropped to an average of 0.30. This trend was not significant in the Baker coal bed. In general, higher mineral matter in the coals was associated with higher REEs. In coal preparation plants, refuse rocks can have up to 360 ppm REE. However, the ashes of the cleanest coals had higher REE levels. Such ashes also have a higher ratio of heavy to light REEs. The highest REE concentrations were found in the claystones and the shales associated with the coal beds. Since the naturally occurring calcite, quartz, and pyrite samples were depleted in REEs, an association of REEs with the clay minerals can be suggested.