Abstract: The transient electromagnetic method is widely used in hydrogeological exploration of coal mine due to its sensitivity to low resistance, when the coal seam is buried deeply and there are various electrical layers on the upper strata, the calculation results of TEM do not reflect the actual geological conditions. We research into OCCAM inversion, that makes the error objective function achieve the minimum of the regularization parameter, the iteration step size control method of compression during the iteration step size is too large, and the smooth model can improve the resolution of inversion. The inversion techniques of regularization parameter selection, optimal step size and constraint model are used in transient electromagnetic data processing. The theoretical model data is inverted, and the inversion result is consistent with the electric distribution of the model, it shows that the algorithm is correct. The application of TEM in deep coalfields in North China showed that OCCAM inversion is able to distinguish the various electrical strata above coal beds, and the result is good.