A set of alternating siliceous rocks and siliceous shales over 3.2 meters thick at the base of the Cambrian Niutitang Formation provide a good outcrop to examine the relationship between the composition of organisms, depositional environment and source rock formation. A set of 68 samples was collected layer by layer and analysed for TOC (Total Organic Content) and organisms present. The organisms consist of planktonic microalgae, benthic macroalgae, acritarchs, sponge spicules and Pogonophoran worms. From the presence of different algae and acritarchs it is clear that the water level fluctuated with initial increases followed by a decrease. The deep water fauna is rich in benthic red algae and acritarch species (Heliosphaeridium longum and Asteridium tornatum), and the TOC contents are relatively high. The benthic algae microfacies has the highest TOC contents (average 3.50%), while the planktonic algae microfacies has an average TOC of 1.46%, and other microfacies having an average TOC <1.00%. The discovery of sponge spicules and Pogonophoran worms, which are typical of hydrothermal environments, suggests that source rock formation was influenced by hydrothermal events on several occasions. The sponge spicule and Pogonophoran worm microfacies have the lowest TOC content, suggesting the samples with strong hydrothermal activity may be not good for the source rock formation.