The Ordovician Ottosee Formation in eastern Tennessee is largely a siliciclastic mudstone and shale unit, but it also contains isolated lenses of oolitic limestone. This study is an analysis of depositional and diagenetic environments of an Ottosee oolite. The oolite body has its long axis parallel to depositional strike, is completely surrounded by Ottosee mudstone, and lies close to the Ordovician shelf edge. Sedimentary structures (especially cross-beds) of all types are observed. Plane-bedding is evident in the bankward portion of the body; bidirectional cross-beds occur in the more basinward parts. Intraclasts are sometimes noted, as are fossils with mud fillings or adhering mud. Silt perched on elongate grains is common. Four lithotypes within the oolite body are differentiated by the proportions of ooids, fossils, and terrigenous grains. Lithotype 1 is a quartz sandstone with few small ooids or fossils. Lithotype 2 is a coarse-grained ooid grainstone with large, well-developed ooids and no fossils. Lithotype 3 is a skeletal-ooid packstone; this is the only lithotype containing much mud. Lithotype 4 is a superficial ooid grainstone that contains small ooids and few fossils. By analogy with Recent oolite environments, each of the lithotypes corresponds to a subenvironment within the Ordovician shoal. Lithotype 1 represents subtidal sand waves that provided relief and allowed the establishment of the oolite shoal. Lithotype 2 corresponds to the mobile fringe environment on the basinward side of Recent shoals. Lithotype 3 represents anastomosing tidal channels that cross-cut other subenvironments. Lithotype 4 corresponds to modern bankward-stabilized oolite, where sediment is bound by algae or sea-grass. Several aspects of diagenesis were investigated, including cement types and paragenesis. While some variation in cement sequences occurs between lithotypes, at least two generations of cement are present: 1) an early marine, isopachous, bladed calcite cement, and 2) a freshwater, phreatic, equigranular calcite cement representing later diagenesis. The distribution of cement types is strongly dependent on lithotype. In lithotype 2 and to some extent 3, extensive early cements formed; lithotypes 1 and 4 contain little early cement, however, and thus survived until later diagenesis, before porosity occlusion. The depositional environment was a major control of diagenetic pathway.