Abstract：The Cambrian strata are widely distributed in western Hubei area. Abundant Sunella (Bradoriida), Perspicaris (large bivalved arthropods), macroscopic algal, hyolithes and (?)Sinospongia (Suspicious sponges) have been found in the lower black carbonaceous shale of the Cambrian Niutitang Formation from Tianzhu area of Changyang County, Hubei Province. In addition, scattered pyrite is seen in black shale. Based on a detailed study of palaeoecology and the characteristics of fossils preservation，the authors have reached the conclusion that, during the early sedimentary stage of Niutitang Formation in Changyang County of western Hubei Province, macro-organism lived in an environment of shallow water which was suboxic at the bottom, oxic in the upper part characterized by good light transmission and relative calmness, and that the sea bottom surface was located nearby the redox interface. Besides, under the background of rapid deposition, large amounts of water and dead biological-bodies were embedded in shale, the amount of water exchange between the depositional water and the external water decreased gradually, and H2S gas was generated by rotton organism in the process of deposition, forming a strong reduction environment in sediments, so that organic matter could be preserved, which eventually formed black shale.