Addressing the challenge of coal extraction beneath villages located on the lower plate of a fault in the Dashi Mine of the Fengfeng Mining Area of Jizhong Energy, and considering the geological conditions of the mining area, an optimized grouting and subsidence reduction scheme for overburden separation was designed. Measures were proposed to address abnormal conditions influenced by the fault. Based on the fault conditions revealed by on-site drilling, the drilling layout was adjusted to achieve grouting reinforcement in the separation zones of the upper and lower plates of the fault, as well as in the fault fracture zone. The cumulative grouting volume on the 03 working face reached 178,300 tons, with a total injection-extraction ratio of 55%. Analysis of the grouting volume in the upper and lower plate areas revealed that coal seam mining activates the upper fault, leading to the formation of separation spaces in the lower plate, while the upper plate has limited capacity to form separation spaces. For grouting in the overburden separation layer influenced by the fault, it is advisable to appropriately increase the number of treatment holes in the upper plate to ensure effective treatment, and to increase the grouting volume in the lower plate space to effectively fill the separation zone. Using the probability integral method to predict surface subsidence on the 03 working face, it was calculated that the maximum surface subsidence during conventional mining reached 2200mm. After implementing the overburden separation grouting technology for subsidence reduction, the maximum surface subsidence decreased to 1025mm, with an estimated subsidence reduction rate of 53.4%. The on-site surface subsidence monitoring results show that the surface subsidence above the 03 working face first increases and then decreases, with the maximum subsidence located in the middle of the working face, with a subsidence amount of 768mm, and the subsidence reduction effect is good.