The Lower Toarcian Posidonia Shale is famous for its excellently preserved fossils and its high amount of organic matter (up to 16%). Both quality of preservation and accumulation of organic matter have been explained by permanent anoxic bottom water conditions. High-resolution geochemical, sedimentological and palaeoecological investigations of various sections of the Posidonia Shale in SW-Germany, however, indicate that oxygen availability was variable and ranged from short oxygenated periods to longer-term anoxia. The benthic macrofauna consists of nine fossil communities and was used, in combination with geochemical data, to reconstruct a time-averaged oxygen curve. Anoxic conditions prevailed during the deposition of the Toarcian black shales; they were, however, punctuated by various short periods (weeks to years) with oxygenated bottom water conditions. Sedimentological (e.g. distinctiveness of microlamination, siliciclastic content) and geochemical parameters (e.g. organic matter content, isotopic signatures: δ¹⁸O and δ¹³C, molecular redox parameters: pristane/phytane ratio, arylisoprenoids) exhibit a remarkable covariation and seem to be controlled by sea level fluctuations. Maximum oxygen depletion and an extreme negative shift of δ¹³C_org values (−34‰) occurred during the early falciferum-zone. This is explained by the recycling of ¹²C-enriched carbon derived from remineralization of organic matter on and within the substrate during low sea level stand and a highly elevated redox boundary including photic zone anoxia. The subsequent transgression permitted enhanced water exchange with the Tethyan Ocean and caused improvement of living conditions at the end of the falciferum-zone. Other important factors controlling the depositional environment are the overall palaeogeographic situation and climate. The early Jurassic is the latest period before break-up of Pangaea and probably was ruled by a strong meridional atmospheric circulation system with pronounced seasonal changes of prevailing trade- and monsoon-wind systems. An estuarine circulation with a positive water balance and surface water with slightly reduced salinity in the summer alternated with an anti-estuarine circulation and a negative water balance in the winter. During the summer months a stratified water column with anoxic conditions below the halocline developed. δ¹⁸O data indicate low salinity in the surface water during the monsoon-influenced summer. High productivity was then located in the photic zone and the corresponding isotopically light δ¹⁸O-signal was fixed in the calcareous nannoplankton. During the winter months a saline circulation system brought oxygen to the benthic environment, favouring temporary benthic colonization, especially during times of relative sea level high stand.