Inertinite maceral compositions of the Late Permian coals from three sections in the terrestrial and paralic settings of eastern Yunnan are analyzed in order to reveal the paleo-fire events and the atmospheric oxygen levels in the latest Permian. Although the macerals in the studied sections are generally dominated by vitrinite, the inertinite group makes up a considerable proportion. Its content increases upward from the beginning of the Late Permian to the coal seam near the Permian-Triassic boundary. Based on the microscopic features and the prevailing theory that inertinite is largely a by-product of paleo-fires, we suggest that the increasing upward trend of the inertinite abundance in the latest Permian could imply that the Late Permian peatland had suffered from frequent wildfires. Since ignition and burning depend on sufficient oxygen, a model-based calculation suggests that the O2 levels near the Wuchiapingian/Changhsingian boundary and the Permian-Triassic boundary are 27% and 28% respectively. This output adds supports to other discoveries made in the temporal marine and terrestrial sediments, and challenges the theories advocating hypoxia as a mechanism for the Permian-Triassic boundary crisis.