Biological and ecological changes across the Paleogene hyperthermal events were accompanied by dramatic shifts in sedimentation systems in both marine and continental environments. This study investigates the formation of authigenic glauconite within a biostratigraphically constrained section encompassing the Paleocene-Eocene Thermal Maximum (PETM). Paleogene transgressive shelf deposits in the Jaisalmer Basin in western India are represented by the Khuiala Formation, consisting of grey shale, limestone, and glauconitic shale. Foraminiferal assemblage not only constrains the age of the glauconitic shale to planktic zone E1 but also indicates the deposition of sediments in an oxygen-depleted mid-shelf environment. A detailed geochemical and mineralogical characterization of the authigenic glauconite within the mid-shelf deposits reveals the highest glauconite content within the maximum flooding zone, immediately below the negative carbon isotope excursion representing the PETM, followed by its steady decrease. The geochemical signature of the glauconite is unusual for its high Al2O3 and MgO and medium Fe2O3 and SiO2 contents. The K2O content suggests the ‘evolved’ nature of the glauconite, which is confirmed by the X-ray diffractional parameters and the presence of the ‘rosette’ texture in FEG-SEM images. The glauconite evolved by Al-for-Fe substitution in the octahedral site and subsequent fixation of K+ into the interlayer sites. The high alumina content of the glauconite corresponds to the high Al3+ in the tetrahedral layer, inherited from an aluminous substrate. Mössbauer spectroscopy suggests the dominance of Fe3+ compared to Fe2+ in the octahedral site of glauconite pellets. The unusual variety of glauconite formed by the transformation of continent-derived kaolinite and iron oxide in oxygen-depleted porewater conditions. Glauconite authigenesis in the Khuiala Formation is strongly influenced by the warm climatic condition, oxygen-depletion in the mid-shelf environment, and sharp marine transgression promoting sediment starvation associated with the PETM.