Reconciliation of fossil assemblages and sedimentological data with the paleogeography of east-central Europe during the Middle Miocene has yielded a new interpretation about paleotemperature. The Pannonian basinal system of the Paratethys represents an unconventional and complex setting for cool-water carbonate-siliciclastic sedimentation and volcanism. The Middle Miocene Badenian Stage of Hungary is represented by four carbonate microfacies within the Pannonian basinal system. Algal rudstones and floatstones, composed mostly of rhodolites, and bioclastic packstones, grainstones, and wackestones, accumulated in distinct basins within a regional framework of synrift tectonism, volcanism, and siliciclastic sedimentation. The diachronous nature of these deposits reflect the repeated connection and disconnection of the Paratethys. Minimum sediment accumulation rates varied widely within the local basins of deposition (39-40 mm/1000 yr to <1 mm/1000 yr). A temperate-type carbonate basinal system is suggested by variations in faunal diversity, Heterozoan foramol biological associations dominated by red algal sediments, limited development of Porites patch reefs, a relatively high paleolatitude, and higher global sea-level position for the Middle Miocene. Tectonism and the accompanying changes in paleogeography, oceanic circulation, and upwellings of colder water during drowning events may account for the paleoclimate represented by the cool-water carbonate sediments of the Paratethys during the Middle Miocene.