The Bächental bituminous marls (Bächentaler Bitumenmergel) belonging to the Sachrang Member of the Lower Jurassic Middle Allgäu Formation were investigated using a multi-analytical (microscopy, XRD analysis, bulk geochemistry, stable isotopy, and organic geochemistry) approach to determine environmental, depositional, and diagenetic controls on the formation of organic-rich deposits in a semi-restricted basin of the NW Tethys during the Early Jurassic. The marls were subdivided into three discrete units (Units 1-2a-2b-3 from base to top) on the basis of mineralogical composition, source-rock parameters, redox conditions, salinity variations, and diagenetic processes. Redox proxies indicate varying suboxic to euxinic conditions during deposition of the Bächental section. In suboxic Units 1 and 3, organic matter (OM) was intensely degraded by Mn reduction. This process additionally triggered the formation of kutnohorite featuring abnormally negative carbonate-C isotope values at the chemocline. In contrast, sulfate reduction was the dominant degradation process in anoxic-euxinic Unit 2 and Mn-bearing calcite formed below the chemocline and containing small amounts of isotopically light C is the main diagenetic carbonate phase. Redox variations were mainly controlled by sea-level fluctuations with the tectonically complex bathymetry of the Bächental basin determining watermass exchange with the Tethys Ocean. Accordingly, strongest anoxia and highest TOC content occur in the middle part of the section coincident with a flourishing of algal and planktonic organisms during a period of relative sea-level lowstand that induced salinity stratification in a stagnant basin setting. This level corresponds to the time interval of the lower Toarcian oceanic anoxic event. However, the absence of the widely observed lower Toarcian negative carbon isotope excursion in the study section questions its unrestricted use as a global chemostratigraphic marker. The onset of reducing conditions in the Bächental basin coincided with the occurrence of charred OM and an influx of volcaniclastic detritus that was possibly connected to complex rifting processes of the Alpine Tethys and with a globally observed eruption-induced extinction event. The level of maximum OM accumulation corresponds to the main eruptive phase of the Karoo-Ferrar LIP, confirming its massive impact on global climate and oceanic conditions during the Early Jurassic. The study section is thus a record of the complex interaction of global (i.e., LIP) and local (e.g., redox and salinity variations, basin morphology) factors that caused reducing conditions and OM enrichment in the Bächental basin. These developments resulted in highly inhomogeneous environmental conditions in semi-restricted basins of the NW Tethyan domain during the Early Jurassic.