The Late Permian Phosphoria Formation of the western United States contains 1.7 × 1012 t of phosphate and locally as much as 32.9% total organic carbon. The mineral wealth of the Phosphoria Formation is generally attributed to Late Permian upwelling along the western margin of the continent. Unlike in most modern environments, upwelling in the Late Permian occurred proximal to a broad, shallow, evaporative sea rather than an abrupt continental margin. Evaporite deposits that are contemporaneous with the organic- and phosphate-rich strata are present within the Phosphoria and adjacent basins. Elevated concentrations of the biomarker gammacerane are ubiquitous in the organic-rich facies of the Phosphoria Formation, which suggests that the basin was salinity stratified. Depositional environments incorporating both upwelling and salinity stratification are unusual and poorly documented in modern settings. We infer the presence of salinity stratification in the Phosphoria basin and propose a paleoceanographic model of the Phosphoria sea during the deposition of organic- and phosphate-rich sediment. From the western margin of the continent, upwelling water flowed into the evaporative Phosphoria sea, replacing and overriding hypersaline bottom water that drained westward. This paleoceanographic model of the Phosphoria sea may help to explain the distribution and preservation of organic- and phosphate-rich strata in the Phosphoria Formation.