Fine-grained carbon-rich sediments have received increasing attention due to their significance in the formation of unconventional petroleum resources, but their depositional patterns and controlling mechanisms remain poorly understood. The present paper presents a systematic investigation of the fine-grained sedimentation, high-frequency sedimentary cycles and carbon enrichment of the Mowry Formation in the Powder River Basin, based on analysis of core, well logs and seismic data. Nine lithofacies and five lithofacies associations identified in the formation are interpreted as various flow deposits such as hyperpycnal flow, wave-enhanced sediment-gravity flow, storm flow, weak bottom current and flocculent suspension, which formed in an epeiric sea from the prodelta, inner shelf, to mid-outer shelf environments. The high-frequency sedimentary cycles are recognized by flooding surfaces and are attributed to sea level change related to the Milankovitch climate cycles. The facies development was primarily controlled by the interplay of sea-level fluctuations and sediment supply. Facies associations formed during flooding periods and dominated by flocculent suspension deposits, exhibit higher TOC, whereas those formed during regressive phases and dominated by hyperpycnal flows deposits display lower TOC. Sea-level rise, reducing environments and weak hydrodynamic conditions are conducive to organic matter accumulation. The study has improved our understanding of the depositional model for a fine-grained, carbon-rich epeiric shelf environment.