Sediment-hosted massive sulfide (SHMS) deposits are an important source of global zinc resources, and the Red Dog Pb-Zn-Ag ± Ba district in Alaska (USA) contains giant deposits of this type. The existing model for ore formation at Red Dog involves early diagenetic replacement of sediment deposited in a restricted basin with stratified suboxic bottom waters. We present new observations of trace fossils Schaubcylindrichnus ichnospecies (isp.) and Chondrites isp. in several Red Dog deposits. The presence of the trace fossils, the size of the largest burrows, and the pervasiveness of the ichnofabric indicate that at least some intervals of the host sediment were deposited in an oxygenated middle to outer shelf environment. The burrow linings and infill are replaced by barite, hydrothermal quartz, and sulfide minerals, and the lack of compaction suggests that mineralization was diagenetically early. To reconcile these data with those from previous regional sedimentological and lithogeochemical studies, we propose a new model whereby the ore-hosting sediment was deposited in a shelfal setting in which redox conditions were affected by a fluctuating oxygen minimum zone. The strong spatial correlation between bioturbation and Red Dog SHMS deposits suggests that the presence of trace fossils may have played an important role in controlling the flow of ore-forming fluids by increasing host sediment permeability.