Detailed sedimentological and quantitative taphonomical analyses of 11,974 fossil specimens from an early Cambrian (Stage 3) Chengjiang-type deposit near Haikou, Yunnan, reveals significant relationships between the original depositional environments and the composition and preservation of their respective fossil assemblages. In general, the Maotianshan Shale is characterized by superimposed couplets of laminated background and thin event mudstone layers representing two distinct taphofacies, A and B, respectively. Fossils in taphofacies A consist predominantly of indeterminate organic elements and fecal or algal strings with few, poorly preserved, soft-bodied animals. Among those, disarticulated arthropods account for 84.3% of specimens (mostly isolated valves of Kunmingella douvillei) and 51.4% of species. Poriferans represent 7.4% of specimens and 22.9% of species. Fossils in this taphofacies have undergone significant pre- or syn-burial decay and represent limited time-averaged assemblages exhibiting low species richness. By contrast, taphofacies B contains greater numbers of species and specimens and better preserved soft-bodied animals. Taphofacies B represents mostly smothered organisms by distal tempestites. Arthropods are also dominant in taphofacies B, both in terms of species richness (41%) and abundance of specimens (44%). Poriferans, priapulids, lobopods, and brachiopods exhibit similar low species richness (6–8% each), but poriferans and lobopods are numerically rare, at around 1% each, whereas priapulids and brachiopods make up 26% and 24% of specimens, respectively. The arthropod Kunmingella douvillei (19%), the priapulid Cricocosmia jinningensis (19%), and the brachiopod Diandongia pista (18%) are the most abundant species in taphofacies B. Fossil assemblages in taphofacies A and B have similar recurrent and abundant species and similar temporal trends in evenness and richness, but taphofacies A captures only a portion of the species that are preserved in taphofacies B. These results suggest that the fossil assemblages present in both taphofacies represent a single local community subjected to two different taphonomic processes and imply similar recurrent environmental conditions within the section studied.