This study investigates the application of the horizontal stratified mining method to the extraction of steeply inclined unstable coal seams at the Puxi Mine. The stress environment in the mining area, the relationship between the supports and surrounding rock, the control of the rock layers in the caving zone, and the mechanical analysis of the roof collapse following the extraction of the steeply inclined coal seam were examined. The stress conditions in the mining area under the horizontal stratified mining method were explored, and a numerical analysis model was established using FLAC3D software, based on the rock mechanics parameters of the Puxi Mine’s rock layers and strata. The results indicate that, in the stress environment of the horizontal stratified mining method, the mining area is subject to not only the self-weight stress from the surrounding strata, large horizontal ground stresses, and gas pressures, but also concentrated stresses in both the dip and strike directions. When using this mining method, the stability of the two sides of the tunnel is generally good due to the surrounding rock being of a relatively stable nature. However, the roof collapse in the upper layers during the extraction of the lower layers is one of the factors affecting the safety of the support structures in the lower layers, necessitating enhanced support management. Deformation is expected in the mining face of the lower layers during extraction, and measures must be taken to prevent any instances of roof spalling. Therefore, the horizontal stratified mining method is considered feasible for the extraction of steeply inclined unstable coal seams at the Puxi Mine.