Organic matter from two black shale units in the Santana Formation, Araripe Basin, NE Brazil, has been studied to investigate the palaeoenvironmental conditions prevailing during formation of this famous fossil lagerstätte. Optical and organic geochemical analyses indicate a predominantly autochthonous source with very limited terrestrial input. Molecular fossils of green sulphur bacteria show that the water column was stratified with euxinic conditions reaching up into the photic zone. Thus, mass-mortality events of fish may be explained by intrusion of sulphide-containing waters. The low quantity of material derived from land plants in this interior marine setting is interpreted to reflect a consequence of enhanced marine productivity, resulting in dilution of the continental signal. Different depositional scenarios are proposed to explain our findings including (1) coastal erosion and nutrient leaching during a transgressive event, (2) intrusion of euxinic waters during an early Albian OAE or (3) an estuarine circulation pattern associated with thermohaline stratification.