Studies of the upper Turonian to upper Coniacian or lower part of Niobrara Formation (in ascending order, the Fort Hays Limestone Member and the marlstone, shale, and limestone of the lower part of the Smoky Hill Shale Member) reveal a significant relationship between petroleum source rock potential and paleoclimate. Trends in bioturbation, δO18 (oxygen isotopic ratio), and Corg (organic carbon content) during lower Niobrara deposition suggest that paleoclimatic factors limited bioturbation of the sediment, favored high Corg contents, and resulted in excellent source rock potential in the shale unit of the lower Smoky Hill Member. From the Fort Hays through the overlying marlstone unit, δO18 in inoceramid shells shows a gradual shift from nearly normal marine values (−2 to −4%) to lighter values (−4 to −6%); over the same interval, Corg changes from relatively low values (0.1–1.4%) to moderate values (0.5 - 2.5%). Bioturbation throughout these units is high. A marked shift toward heavier δO18 (−6.0 to −9.1 %) occurs upward into the shale unit and coincides with increase in Corg (2.3–4.9%) and an absence of bioturbation. In the limestone unit, δO18 shifts to less negative values (−6.2 to −6.5%), Corg decreases (average 1.5%), and bioturbation returns. The trend toward more negative δO18 and higher Corg values in the shale unit is inferred to reflect a lowering of surface-water salinity in the Western Interior seaway due to climatic warming and increased freshwater imput. Resultant salinity stratification of the water column apparently inhibited vertical mixing and oxgenation of the bottom waters, resulting in limited benthic activity and enhanced preservation of organic matter.