Large-scale release of isotopically light carbon is responsible for the carbon isotope excursion (CIE) of the Toarcian Oceanic Anoxic Event during the Lower Jurassic. Proposed sources include methane hydrate dissociation, volcanogenic outgassing of carbon dioxide and/or thermogenic methane release from the Karoo‐Ferrar magmatic province (southern Africa). Distinct small-scale shifts superimposed on the long-term CIE have been interpreted as rapid methane pulses linked to astronomically forced climate changes. In the Peniche reference section (Portugal), these small-scale shifts correspond to distinct brownish marly layers featuring markedly high mercury (Hg) and magnetic mineral concentration. Total organic carbon and Hg increase are uncorrelated, which suggests input of Hg into the atmosphere, possibly released after the intrusion of the Karoo-Ferrar sills into organic-rich sediments. Enhanced magnetic properties are associated with the presence of martite, washed-in oxidized magnetite, inferred to be due to increased aridity on the continental hinterland. This study provides strong evidence for a direct link between the Karoo-Ferrar magmatism, the carbon-isotope shifts and the resulting environmental changes.