Sea-level changes in the upper Colorado Group of southeastern Alberta, Western Canada, are expressed in the Medicine Hat Formation and First White Speckled Shale, and can be documented through paleontological analysis. Presently, the Medicine Hat Formation is actively explored for its large, biogenic gas reserves. Combined macrofossil, micro-fossil, nannofossil, and dinoflagellate biostratigraphy reflect a Santonian age for these units. Fossil analysis indicates that during Late Cretaceous time the Sweetgrass Arch was a bathymetric high on which a shallow marine environment developed within an otherwise relatively deep-water basin, creating conditions for deposition of Medicine Hat Formation sands. The overlying First White Speckled Shale was deposited during a time of sea-level highstand during the Niobrara cycle of deposition. In southeastern Alberta, however, a series of short-lived, relative sea-level falls during late Santonian time resulted in siltstone deposition and development of the Sweetgrass Member in the Colorado Group and similar units on the western flank of the Sweet-grass Arch. During such events, marginal marine conditions, including possibly increased input of detrital material or lower salinities, caused a reduction of nannofossil diversity and near absence of planktic foraminifera. In the past, the coarser-grained Sweetgrass Member has been miscorrelated with the Medicine Hat sandstone. Paleontological data analyzed in our study, however, clearly demonstrate a higher stratigraphic position for the Sweetgrass Member, within the First White Speckled Shale. The base of the Sweetgrass Member and the boundary between the First White Speckled Shale and the overlying Mill Creek/Lea Park Formations are marked by erosional unconformities, each of which is overlain by siltstone and sandstone. Because the Medicine Hat Formation and Sweetgrass Member are thin, paleontological evidence provides a reliable tool for stratigraphic placement, whereas correlation based solely on lithology may lead to erroneous results.