Deep-water mudstones from ancient epicontinental settings are significant repositories for organic matter, but the detailed temporal variations of, and controls on, the abundance and type of organic matter (OM) is little studied. Using micro-petrographic and geochemical data from late Mississippian mudstones of the Widmerpool Gulf, UK, the processes that delivered fine-grained sediment to this basin during a glacioeustatic sea-level cycle are interpreted from detailed lithofacies analysis. Seven primary lithofacies are identified from core, which show specific and systematic variations in total organic carbon (TOC) content and bulk carbon isotope composition of organic material (δ13Corg). During sea-level highstands, thin-bedded carbonate-bearing mudstones are the dominant facies deposited, contain up to 6.6% TOC (average 4.6 ± 1.3%), and have mean δ13Corg of −28.5 ± 0.9‰. During phases of lower sea level, thin-bedded silt-bearing clay-rich mudstones with up to 4.1% TOC (average 2.3 ± 0.8%; mean δ13Corg: −28.2 ± 1.0‰) were interbedded with more organic-lean graded silt-bearing mudstones and sand-bearing silt-rich mudstones (average TOC: 1.7 ± 0.6%) derived from turbidity currents. The latter (mean δ13Corg: −26.2 ± 0.7‰) are closely linked to significant proportions of terrestrial plant material, while some rare plant debris- and sand-bearing mudstones produced from debris flows have more than 7.0% TOC and δ13Corg ≥ −26.0‰. The δ13C values of wood fragments ranged from −27.1‰ to −24.0‰ and therefore the δ13Corg is interpreted as a function of the ratio of marine and terrestrial organic matter. More negative values in the carbonate-bearing and the clay-rich mudstones indicate marine planktonic algae whereas the least negative values reflect greater contribution of terrestrial plant material. The data suggest that the marine conditions prevailed and supported marine planktonic algae throughout different sea-level stages. Marine OM was delivered to the sea floor by continuous hemipelagic settling whereas terrestrial OM was delivered by sediment density flows. Variations in bioproductivity and dilution by siliciclastics influenced the burial rate of marine OM. Organic-rich mudstones preserved in these marine basins are potential hydrocarbon source rocks, especially as unconventional (shale gas) reservoirs. Detailed microtextural and compositional analysis coupled with rigorous geochemical parameters as used in this study are important for the understanding of the source-rock potential of basinal mudstones, and of fine-grained organic-rich sediments in general.